UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2023


☐			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 L.P.

(Exact name of registrant as specified in its charter)


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

19003 IH-10 West

San Antonio, Texas

(Address of principal executive offices)

78257

(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 þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes þ No o

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

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of common units outstanding as of ~~April 30,~~July 31, 2023 was ~~110,904,702.~~110,907,171.

Table of Contents

NUSTAR ENERGY L.P.

FORM 10-Q

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2023 and 2022	5
	Consolidated Statements of Partners’ Equity and Mezzanine Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2023 and 2022	6
	Condensed Notes to Consolidated Financial Statements	78
	1. Organization and Basis of Presentation	78
	2. Dispositions	78
	3. Revenue from Contracts with Customers	810
	4. Debt	911
	5. Commitments and Contingencies	1012
	6. Series D Cumulative Convertible Preferred Units	1012
	7. Partners' Equity	1114
	8. Net Income (Loss) per Common Unit	1216
	9. Supplemental Cash Flow Information	1317
	10. Segment Information	1418

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1620
	Cautionary Statement Regarding Forward-Looking Information	1620
	Overview	1620
	Results of Operations	1823
	Liquidity and Capital Resources	2129
	Critical Accounting Policies	2635

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2736

Item 4.	Controls and Procedures	2837

PART II – OTHER INFORMATION



Item 5.	Other Information	38

Item 6.	Exhibits	2939

SIGNATURES		3040

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited, Thousands of Dollars, Except Unit Data)


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	5,151	$	14,489	Cash and cash equivalents	$	3,813	$	14,489
Accounts receivable, net	Accounts receivable, net	137,647		149,971		Accounts receivable, net	125,116		149,971

Inventories	Inventories	15,518		15,397		Inventories	10,477		15,397

Prepaid and other current assets	Prepaid and other current assets	15,729		24,067		Prepaid and other current assets	27,548		24,067

Total current assets	Total current assets	174,045		203,924		Total current assets	166,954		203,924
Property, plant and equipment, at cost	Property, plant and equipment, at cost	5,658,551		5,733,685		Property, plant and equipment, at cost	5,693,440		5,733,685
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(2,344,543)		(2,330,602)		Accumulated depreciation and amortization	(2,397,938)		(2,330,602)
Property, plant and equipment, net	Property, plant and equipment, net	3,314,008		3,403,083		Property, plant and equipment, net	3,295,502		3,403,083
Intangible assets, net	Intangible assets, net	504,288		513,696		Intangible assets, net	494,880		513,696
Goodwill	Goodwill	732,356		732,356		Goodwill	732,356		732,356

Other long-term assets, net	Other long-term assets, net	199,017		120,627		Other long-term assets, net	200,723		120,627
Total assets	Total assets	$	4,923,714	$	4,973,686	Total assets	$	4,890,415	$	4,973,686

Liabilities, Mezzanine Equity and Partners’ Equity	Liabilities, Mezzanine Equity and Partners’ Equity					Liabilities, Mezzanine Equity and Partners’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	69,435	$	67,765	Accounts payable	$	64,938	$	67,765

Current portion of finance leases	Current portion of finance leases	4,535		4,416		Current portion of finance leases	4,677		4,416

Accrued interest payable	Accrued interest payable	76,112		37,607		Accrued interest payable	38,476		37,607
Accrued liabilities	Accrued liabilities	56,333		76,072		Accrued liabilities	66,168		76,072

Taxes other than income tax	Taxes other than income tax	6,999		10,607		Taxes other than income tax	7,695		10,607

Total current liabilities	Total current liabilities	213,414		196,467		Total current liabilities	181,954		196,467
Long-term debt, less current portion of finance leases	Long-term debt, less current portion of finance leases	3,113,074		3,293,415		Long-term debt, less current portion of finance leases	3,310,561		3,293,415

Deferred income tax liability	Deferred income tax liability	3,246		3,219		Deferred income tax liability	3,262		3,219
Mandatorily redeemable Series D preferred units (Note 6)						Mandatorily redeemable Series D preferred units (Note 6)	81,229		—
Other long-term liabilities	Other long-term liabilities	211,275		131,299		Other long-term liabilities	213,828		131,299
Total liabilities	Total liabilities	3,541,009		3,624,400		Total liabilities	3,790,834		3,624,400

Commitments and contingencies (Note 5)	Commitments and contingencies (Note 5)					Commitments and contingencies (Note 5)

Series D preferred limited partners (16,346,650 units outstanding as of March 31, 2023 and December 31, 2022) (Note 6)		450,641		446,970
Series D preferred limited partners (Note 6)						Series D preferred limited partners (Note 6)	230,264		446,970

Partners’ equity (Note 7):	Partners’ equity (Note 7):					Partners’ equity (Note 7):
Preferred limited partners	Preferred limited partners					Preferred limited partners
Series A (9,060,000 units outstanding as of March 31, 2023 and December 31, 2022)		218,307		218,307
Series B (15,400,000 units outstanding as of March 31, 2023 and December 31, 2022)		371,476		371,476
Series C (6,900,000 units outstanding as of March 31, 2023 and December 31, 2022)		166,518		166,518
Common limited partners (110,903,880 and 110,818,718 units outstanding as of March 31, 2023 and December 31, 2022, respectively)		207,164		177,620
Series A (9,060,000 units outstanding as of June 30, 2023 and December 31, 2022)						Series A (9,060,000 units outstanding as of June 30, 2023 and December 31, 2022)	218,307		218,307
Series B (15,400,000 units outstanding as of June 30, 2023 and December 31, 2022)						Series B (15,400,000 units outstanding as of June 30, 2023 and December 31, 2022)	371,476		371,476
Series C (6,900,000 units outstanding as of June 30, 2023 and December 31, 2022)						Series C (6,900,000 units outstanding as of June 30, 2023 and December 31, 2022)	166,518		166,518
Common limited partners (110,906,500 and 110,818,718 units outstanding as of June 30, 2023 and December 31, 2022, respectively)						Common limited partners (110,906,500 and 110,818,718 units outstanding as of June 30, 2023 and December 31, 2022, respectively)	144,409		177,620

Accumulated other comprehensive loss	Accumulated other comprehensive loss	(31,401)		(31,605)		Accumulated other comprehensive loss	(31,393)		(31,605)
Total partners’ equity	Total partners’ equity	932,064		902,316		Total partners’ equity	869,317		902,316

Total liabilities, mezzanine equity and partners’ equity	Total liabilities, mezzanine equity and partners’ equity	$	4,923,714	$	4,973,686	Total liabilities, mezzanine equity and partners’ equity	$	4,890,415	$	4,973,686

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 March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Revenues:	Revenues:						Revenues:
Service revenues	Service revenues	$	285,266	$	265,305		Service revenues	$	275,367	$	278,067	$	560,633	$	543,372
Product sales	Product sales	108,601		144,558			Product sales	102,967		152,090		211,568		296,648
Total revenues	Total revenues	393,867		409,863			Total revenues	378,334		430,157		772,201		840,020

Costs and expenses:	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)	89,162		86,402			Operating expenses (excluding depreciation and amortization expense)	93,363		94,948		182,525		181,350
Depreciation and amortization expense	Depreciation and amortization expense	62,054		63,303			Depreciation and amortization expense	62,530		62,240		124,584		125,543
Total costs associated with service revenues	Total costs associated with service revenues	151,216		149,705			Total costs associated with service revenues	155,893		157,188		307,109		306,893
Costs associated with product sales	Costs associated with product sales	93,461		126,715			Costs associated with product sales	86,914		134,178		180,375		260,893

Impairment loss	Impairment loss	—		46,122			Impairment loss	—		—		—		46,122
General and administrative expenses (excluding depreciation and amortization expense)	General and administrative expenses (excluding depreciation and amortization expense)	28,725		27,071			General and administrative expenses (excluding depreciation and amortization expense)	31,620		27,909		60,345		54,980
Other depreciation and amortization expense	Other depreciation and amortization expense	1,555		1,824			Other depreciation and amortization expense	1,037		1,823		2,592		3,647

Total costs and expenses	Total costs and expenses	274,957		351,437			Total costs and expenses	275,464		321,098		550,421		672,535

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

Operating income	Operating income	159,985		58,426			Operating income	102,870		109,059		262,855		167,485

Interest expense, net	Interest expense, net	(57,371)		(49,818)			Interest expense, net	(58,170)		(50,941)		(115,541)		(100,759)

Other income, net	Other income, net	4,509		3,671			Other income, net	2,633		2,012		7,142		5,683
Income before income tax expense (benefit)		107,123		12,279
Income tax expense (benefit)		1,187		(33)
Income before income tax expense							Income before income tax expense	47,333		60,130		154,456		72,409
Income tax expense							Income tax expense	1,192		931		2,379		898
Net income	Net income	$	105,936	$	12,312		Net income	$	46,141	$	59,199	$	152,077	$	71,511

Basic and diluted net income (loss) per common unit (Note 8)		$	0.61	$	(0.22)
Basic and diluted net (loss) income per common unit (Note 8)							Basic and diluted net (loss) income per common unit (Note 8)	$	(0.20)	$	0.20	$	0.42	$	(0.02)

Basic and diluted weighted-average common units outstanding	Basic and diluted weighted-average common units outstanding	110,880,981		110,177,045			Basic and diluted weighted-average common units outstanding	110,905,471		110,306,641		110,893,293		110,242,201

Comprehensive income	Comprehensive income	$	106,140	$	13,244		Comprehensive income	$	46,149	$	100,073	$	152,289	$	113,317

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)


		Three Months Ended March 31,					Six Months Ended June 30,
		2023		2022			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	105,936	$	12,312	Net income	$	152,077	$	71,511
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	63,609		65,127		Depreciation and amortization expense	127,176		129,190
Amortization of unit-based compensation	Amortization of unit-based compensation	3,628		3,412		Amortization of unit-based compensation	7,302		6,746
Amortization of debt related items	Amortization of debt related items	2,607		2,532		Amortization of debt related items	5,224		5,085
Gain on sale of assets	Gain on sale of assets	(41,075)		—		Gain on sale of assets	(41,075)		—

Impairment loss	Impairment loss	—		46,122		Impairment loss	—		46,122

Changes in current assets and current liabilities (Note 9)	Changes in current assets and current liabilities (Note 9)	32,614		17,512		Changes in current assets and current liabilities (Note 9)	1,785		(30,940)
Decrease in other long-term assets, net	Decrease in other long-term assets, net	3,294		3,644		Decrease in other long-term assets, net	5,692		6,626
Decrease in other long-term liabilities		(1,729)		(662)
Increase (decrease) in other long-term liabilities						Increase (decrease) in other long-term liabilities	796		(6,218)
Other, net	Other, net	(4,300)		(4,169)		Other, net	(6,672)		(5,835)
Net cash provided by operating activities	Net cash provided by operating activities	164,584		145,830		Net cash provided by operating activities	252,305		222,287

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(22,083)		(32,750)		Capital expenditures	(54,532)		(71,425)
Change in accounts payable related to capital expenditures	Change in accounts payable related to capital expenditures	(4,308)		(14,498)		Change in accounts payable related to capital expenditures	1,450		(8,716)
Proceeds from insurance recoveries	Proceeds from insurance recoveries	12,395		5,805		Proceeds from insurance recoveries	12,395		5,805
Proceeds from sale or disposition of assets, net of transaction costs	Proceeds from sale or disposition of assets, net of transaction costs	102,670		341		Proceeds from sale or disposition of assets, net of transaction costs	102,769		59,531

Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	88,674		(41,102)		Net cash provided by (used in) investing activities	62,082		(14,805)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Proceeds from long-term debt borrowings	Proceeds from long-term debt borrowings	120,300		253,000		Proceeds from long-term debt borrowings	443,000		480,400

Long-term debt repayments	Long-term debt repayments	(301,600)		(268,800)		Long-term debt repayments	(427,700)		(528,100)

Redemption of Series D preferred units						Redemption of Series D preferred units	(174,515)		—
Distributions to preferred unitholders	Distributions to preferred unitholders	(32,661)		(31,025)		Distributions to preferred unitholders	(64,890)		(62,432)
Distributions to common unitholders	Distributions to common unitholders	(44,362)		(44,041)		Distributions to common unitholders	(88,724)		(88,164)

Other, net	Other, net	(4,365)		(8,848)		Other, net	(12,376)		(11,243)
Net cash used in financing activities	Net cash used in financing activities	(262,688)		(99,714)		Net cash used in financing activities	(325,205)		(209,539)

Effect of foreign exchange rate changes on cash	Effect of foreign exchange rate changes on cash	170		176		Effect of foreign exchange rate changes on cash	310		763
Net (decrease) increase in cash, cash equivalents and restricted cash		(9,260)		5,190
Net decrease in cash, cash equivalents and restricted cash						Net decrease in cash, cash equivalents and restricted cash	(10,508)		(1,294)
Cash, cash equivalents and restricted cash as of the beginning of the period	Cash, cash equivalents and restricted cash as of the beginning of the period	23,377		14,439		Cash, cash equivalents and restricted cash as of the beginning of the period	23,377		14,439
Cash, cash equivalents and restricted cash as of the end of the period	Cash, cash equivalents and restricted cash as of the end of the period	$	14,117	$	19,629	Cash, cash equivalents and restricted cash as of the end of the period	$	12,869	$	13,145

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,~~June 30, 2023 and 2022

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


		Limited Partners								Mezzanine Equity					Limited Partners								Mezzanine Equity
		Preferred		Common		Accumulated Other Comprehensive Loss		Total Partners’ Equity (Note 7)		Series D Preferred Limited Partners (Note 6)		Total			Preferred		Common		Accumulated Other Comprehensive Loss		Total Partners’ Equity (Note 7)		Series D Preferred Limited Partners (Note 6)		Total
Balance as of January 1, 2023		$	756,301	$	177,620	$	(31,605)	$	902,316	$	446,970	$	1,349,286
Balance as of April 1, 2023														Balance as of April 1, 2023	$	756,301	$	207,164	$	(31,401)	$	932,064	$	450,641	$	1,382,705
Net income	Net income	21,584		73,203		—		94,787		11,149		105,936		Net income	22,112		14,015		—		36,127		10,014		46,141
Other comprehensive income	Other comprehensive income	—		—		204		204		—		204		Other comprehensive income	—		—		8		8		—		8
Distributions to partners:	Distributions to partners:													Distributions to partners:
Series A, B and C preferred	Series A, B and C preferred	(21,584)		—		—		(21,584)		—		(21,584)		Series A, B and C preferred	(22,112)		—		—		(22,112)		—		(22,112)
Common ($0.40 per unit)	Common ($0.40 per unit)	—		(44,362)		—		(44,362)		—		(44,362)		Common ($0.40 per unit)	—		(44,362)		—		(44,362)		—		(44,362)
Series D preferred	Series D preferred	—		—		—		—		(11,149)		(11,149)		Series D preferred	—		—		—		—		(10,014)		(10,014)

Unit-based compensation	Unit-based compensation	—		4,384		—		4,384		—		4,384		Unit-based compensation	—		3,006		—		3,006		—		3,006
Series D Preferred Unit accretion		—		(3,671)		—		(3,671)		3,671		—
Series D preferred unit accretion														Series D preferred unit accretion	—		(3,303)		—		(3,303)		3,303		—
Series D preferred unit redemption														Series D preferred unit redemption	—		(32,067)		—		(32,067)		(223,677)		(255,744)
Other	Other	—		(10)		—		(10)		—		(10)		Other	—		(44)		—		(44)		(3)		(47)
Balance as of March 31, 2023		$	756,301	$	207,164	$	(31,401)	$	932,064	$	450,641	$	1,382,705
Balance as of June 30, 2023														Balance as of June 30, 2023	$	756,301	$	144,409	$	(31,393)	$	869,317	$	230,264	$	1,099,581


Balance as of January 1, 2022		$	756,301	$	299,502	$	(73,978)	$	981,825	$	616,439	$	1,598,264
Net income (loss)		15,238		(18,780)		—		(3,542)		15,854		12,312
Balance as of April 1, 2022														Balance as of April 1, 2022	$	756,301	$	239,010	$	(73,046)	$	922,265	$	621,018	$	1,543,283
Net income														Net income	15,669		27,676		—		43,345		15,854		59,199
Other comprehensive income	Other comprehensive income	—		—		932		932		—		932		Other comprehensive income	—		—		40,874		40,874		—		40,874
Distributions to partners:	Distributions to partners:													Distributions to partners:
Series A, B and C preferred	Series A, B and C preferred	(15,238)		—		—		(15,238)		—		(15,238)		Series A, B and C preferred	(15,669)		—		—		(15,669)		—		(15,669)
Common ($0.40 per unit)	Common ($0.40 per unit)	—		(44,041)		—		(44,041)		—		(44,041)		Common ($0.40 per unit)	—		(44,123)		—		(44,123)		—		(44,123)
Series D preferred	Series D preferred	—		—		—		—		(15,854)		(15,854)		Series D preferred	—		—		—		—		(15,854)		(15,854)

Unit-based compensation	Unit-based compensation	—		6,910		—		6,910		—		6,910		Unit-based compensation	—		2,681		—		2,681		—		2,681
Series D Preferred Unit accretion		—		(4,581)		—		(4,581)		4,581		—
Series D preferred unit accretion														Series D preferred unit accretion	—		(4,734)		—		(4,734)		4,734		—
Other	Other	—		—		—		—		(2)		(2)		Other	—		1		—		1		(1)		—
Balance as of March 31, 2022		$	756,301	$	239,010	$	(73,046)	$	922,265	$	621,018	$	1,543,283
Balance as of June 30, 2022														Balance as of June 30, 2022	$	756,301	$	220,511	$	(32,172)	$	944,640	$	625,751	$	1,570,391

See Condensed Notes to Consolidated Financial Statements.

Table of Contents

NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY AND MEZZANINE EQUITY

Six Months Ended June 30, 2023 and 2022

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


	Limited Partners								Mezzanine Equity
	Preferred		Common		Accumulated Other Comprehensive Loss		Total Partners’ Equity (Note 7)		Series D Preferred Limited Partners (Note 6)		Total
Balance as of January 1, 2023	$	756,301	$	177,620	$	(31,605)	$	902,316	$	446,970	$	1,349,286
Net income	43,696		87,218		—		130,914		21,163		152,077
Other comprehensive income	—		—		212		212		—		212
Distributions to partners:
Series A, B and C preferred	(43,696)		—		—		(43,696)		—		(43,696)
Common ($0.80 per unit)	—		(88,724)		—		(88,724)		—		(88,724)
Series D preferred	—		—		—		—		(21,163)		(21,163)



Unit-based compensation	—		7,390		—		7,390		—		7,390
Series D preferred unit accretion	—		(6,974)		—		(6,974)		6,974		—
Series D preferred unit redemption	—		(32,067)		—		(32,067)		(223,677)		(255,744)
Other	—		(54)		—		(54)		(3)		(57)
Balance as of June 30, 2023	$	756,301	$	144,409	$	(31,393)	$	869,317	$	230,264	$	1,099,581





Balance as of January 1, 2022	$	756,301	$	299,502	$	(73,978)	$	981,825	$	616,439	$	1,598,264
Net income	30,907		8,896		—		39,803		31,708		71,511
Other comprehensive income	—		—		41,806		41,806		—		41,806
Distributions to partners:
Series A, B and C preferred	(30,907)		—		—		(30,907)		—		(30,907)
Common ($0.80 per unit)	—		(88,164)		—		(88,164)		—		(88,164)
Series D preferred	—		—		—		—		(31,708)		(31,708)



Unit-based compensation	—		9,591		—		9,591		—		9,591
Series D preferred unit accretion	—		(9,315)		—		(9,315)		9,315		—
Other	—		1		—		1		(3)		(2)
Balance as of June 30, 2022	$	756,301	$	220,511	$	(32,172)	$	944,640	$	625,751	$	1,570,391

See Condensed Notes to Consolidated Financial Statements.

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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) is a Delaware limited partnership primarily engaged in the transportation, terminalling and storage of petroleum products and renewable fuels and the transportation of anhydrous ammonia. 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, LLC, the general partner of our general partner, Riverwalk Logistics, L.P., both of which are indirectly wholly owned subsidiaries of ours.

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

Partial Redemptions of Series D Preferred Units. On June 30, 2023, we redeemed an aggregate 5,500,000 of our Series D Cumulative Convertible Preferred Units (Series D Preferred Units), at a price per unit of $31.88, for an aggregate purchase price of $175.3 million. On June 29, 2023, NuStar Energy L.P. notified the holders of our Series D Preferred Units of our intent to exercise our right to redeem an aggregate 2,560,000 of our Series D Preferred Units, at a price per unit of $32.18 for an aggregate purchase price of $82.4 million. This redemption closed on July 31, 2023. Please see Note 6 for additional information on these redemptions.

Debt Amendments. On June 30, 2023, we amended our $1.0 billion unsecured revolving credit agreement, mainly to extend the maturity date from April 27, 2025 to January 27, 2027. On June 29, 2023, we amended our $100.0 million receivables financing agreement to extend the scheduled termination date from January 31, 2025 to July 1, 2026. Please refer to Note 4 for more information.

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. Operating results for the ~~three~~six months ended ~~March 31,~~June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. 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, 2022.

2. DISPOSITIONS

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 approximately $103.0 million and immediately leased back the Corporate Headquarters for an initial term of twenty years, with two renewal options of ten years each (the Sale-Leaseback Transaction). Upon closing of the sale in the first quarter of 2023, the Sale-Leaseback Transaction qualified as a completed sale, and we recognized a gain of $41.1 million, which is presented in “Gain on sale of assets” on the condensed consolidated statements of comprehensive income. We entered into the Sale-leaseback Transaction in order to monetize the Corporate Headquarters and used the proceeds to repay borrowings on our revolving credit agreement.

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Pursuant to the lease agreement, rent for the initial term starts at $6.4 million per year and increases annually by 2.5%. AsAt inception of ~~March 31, 2023,~~the lease, right-of-use assets and lease liabilities associated with the Sale-Leaseback Transaction assumed a reasonably certain term of 20 years and were included in our consolidated balance sheet as ~~follows:~~follows (thousands of dollars):


	~~March 31, 2023~~
	~~(Thousands of Dollars)~~
Operating lease right-of-use assets:
Other long-term assets, net	$	82,230


Operating lease liabilities:
Accrued liabilities	$	710
Other long-term liabilities	81,498
Total operating lease liabilities	$	82,208

~~As of March 31, 2023,~~Following our entrance into the Sale-Leaseback Transaction, the weighted-average discount rate for our operating leases was 6.1%.

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

Point Tupper Terminal Disposition

On April 29, 2022, we sold the equity interests in our wholly owned subsidiaries that owned our Point Tupper terminal facility in Nova Scotia, Canada (the Point Tupper Terminal Operations) to EverWind Fuels for $60.0 million. The terminal facility had a storage capacity of 7.8 million barrels and was included in the storage segment. We used the sales proceeds to reduce debt and improve our debt metrics.

During the first quarter of 2022, we determined the Point Tupper Terminal Operations met the criteria to be classified as held for sale. We compared the carrying value of the Point Tupper Terminal Operations, which included $42.2 million in cumulative foreign currency translation losses accumulated since our acquisition of the Point Tupper terminal facility in 2005, to its fair value less costs to sell, and we recognized a pre-tax impairment loss of $46.1 million in the first quarter of 2022, which is presented in "Impairment loss" on the condensed consolidated statements of comprehensive income. We believe that the sales price of $60.0 million provided a reasonable indication of the fair value of the Point Tupper Terminal Operations as it represented an exit price in an orderly transaction between market participants. The sales price was a quoted price for identical assets and liabilities in a market that was not active and, thus, our fair value estimate fell within Level 2 of the fair value hierarchy. Upon closing in the second quarter of 2022, we released $39.6 million of foreign currency translation losses from accumulated other comprehensive loss and finalized our sales price, resulting in a gain of $1.6 million, which was presented in “Other income, net” on the condensed consolidated statement of comprehensive income for the period.

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Contract Assets and Contract Liabilities

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


		2023				2022					2023				2022
		Contract Assets		Contract Liabilities		Contract Assets		Contract Liabilities			Contract Assets		Contract Liabilities		Contract Assets		Contract Liabilities
		(Thousands of Dollars)									(Thousands of Dollars)
Balances as of January 1:	Balances as of January 1:									Balances as of January 1:
Current portion	Current portion	$	2,612	$	(17,647)	$	2,336	$	(15,443)	Current portion	$	2,612	$	(17,647)	$	2,336	$	(15,443)
Noncurrent portion	Noncurrent portion	304		(41,405)		504		(46,027)		Noncurrent portion	304		(41,405)		504		(46,027)
Total	Total	2,916		(59,052)		2,840		(61,470)		Total	2,916		(59,052)		2,840		(61,470)

Activity:	Activity:									Activity:
Additions	Additions	125		(16,829)		71		(9,645)		Additions	3,782		(45,998)		2,112		(17,692)
Transfer to accounts receivable	Transfer to accounts receivable	(2,388)		—		(2,037)		—		Transfer to accounts receivable	(2,856)		—		(2,198)		—
Transfer to revenues	Transfer to revenues	—		14,008		(83)		12,117		Transfer to revenues	—		33,718		(83)		24,841

Total	Total	(2,263)		(2,821)		(2,049)		2,472		Total	926		(12,280)		(169)		7,149

Balances as of March 31:
Balances as of June 30:										Balances as of June 30:
Current portion	Current portion	406		(21,065)		277		(13,454)		Current portion	2,703		(27,379)		2,251		(13,555)
Noncurrent portion	Noncurrent portion	247		(40,808)		448		(45,544)		Noncurrent portion	1,139		(43,953)		420		(40,766)
Held for sale		—		—		66		—

Total	Total	$	653	$	(61,873)	$	791	$	(58,998)	Total	$	3,842	$	(71,332)	$	2,671	$	(54,321)

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 consolidated balance sheets. The current portion of contract liabilities ~~are~~is included in “Accrued liabilities” and the noncurrent portion of contract liabilities ~~are~~is included in “Other long-term liabilities” on the consolidated balance sheets.

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

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 ~~March 31,~~June 30, 2023:


		Remaining Performance Obligations			Remaining Performance Obligations
		(Thousands of Dollars)			(Thousands of Dollars)
2023 (remaining)	2023 (remaining)	$	278,253	2023 (remaining)	$	204,812
2024	2024	286,825		2024	337,666
2025	2025	189,473		2025	229,535
2026	2026	128,358		2026	163,771
2027	2027	58,971		2027	81,059
Thereafter	Thereafter	78,451		Thereafter	124,800
Total	Total	$	1,020,331	Total	$	1,141,643

Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to customer contracts that have fixed pricing and fixed volume terms and conditions, including contracts with payment obligations for minimum volume commitments.

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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,					Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022					2023		2022		2023		2022
		(Thousands of Dollars)				(Thousands of Dollars)
Pipeline segment:	Pipeline segment:							Pipeline segment:
Crude oil pipelines	Crude oil pipelines	$	96,603	$	86,124			Crude oil pipelines	$	93,186	$	94,010	$	189,789	$	180,134
Refined products and ammonia pipelines	Refined products and ammonia pipelines	116,580		102,559				Refined products and ammonia pipelines	113,515		106,555		230,095		209,114
Total pipeline segment revenues from contracts with customers	Total pipeline segment revenues from contracts with customers	213,183		188,683				Total pipeline segment revenues from contracts with customers	206,701		200,565		419,884		389,248

Storage segment:	Storage segment:							Storage segment:
Throughput terminals	Throughput terminals	27,315		26,441				Throughput terminals	23,839		30,929		51,154		57,370
Storage terminals (excluding lessor revenues)	Storage terminals (excluding lessor revenues)	42,016		50,719				Storage terminals (excluding lessor revenues)	43,049		47,089		85,065		97,808
Total storage segment revenues from contracts with customers	Total storage segment revenues from contracts with customers	69,331		77,160				Total storage segment revenues from contracts with customers	66,888		78,018		136,219		155,178
Lessor revenues	Lessor revenues	11,326		10,761				Lessor revenues	11,321		10,765		22,647		21,526
Total storage segment revenues	Total storage segment revenues	80,657		87,921				Total storage segment revenues	78,209		88,783		158,866		176,704

Fuels marketing segment:	Fuels marketing segment:							Fuels marketing segment:
Revenues from contracts with customers	Revenues from contracts with customers	100,027		133,260				Revenues from contracts with customers	93,426		140,809		193,453		274,069

Consolidation and intersegment eliminations	Consolidation and intersegment eliminations	—		(1)				Consolidation and intersegment eliminations	(2)		—		(2)		(1)

Total revenues	Total revenues	$	393,867	$	409,863			Total revenues	$	378,334	$	430,157	$	772,201	$	840,020

4. DEBT

Revolving Credit Agreement

~~As of March 31,~~On June 30, 2023, ~~NuStar Logistics’~~we amended our $1.0 billion unsecured revolving credit agreement (the Revolving Credit Agreement), ~~due~~mainly to extend the maturity date from April 27, 2025 to January 27, 2027. The amendment also includes a requirement that we certify that the sum of our Revolving Credit Agreement availability and unrestricted cash balance is no less than $150.0 million on a pro forma basis prior to using any borrowings under the Revolving Credit Agreement to redeem certain unsecured indebtedness or our Series D Preferred Units.

As of June 30, 2023, the Revolving Credit Agreement had ~~$940.4~~$750.4 million available for borrowing and ~~$55.0~~$245.0 million of borrowings outstanding. Letters of credit issued under the Revolving Credit Agreement totaled $4.6 million as of ~~March 31,~~June 30, 2023 and limit the amount we can borrow under the Revolving Credit Agreement. Obligations under the Revolving Credit Agreement are guaranteed by NuStar Energy

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and NuPOP. The Revolving Credit Agreement provides for U.S. dollar borrowings, which bear interest, at our option, based on an alternative base rate or a SOFR-based rate. The Revolving Credit Agreement and certain fees under ~~our $100.0 million receivables financing agreement~~the Receivables Financing Agreement, defined below, are the only debt arrangements with interest rates that are subject to adjustment if our debt rating is downgraded (or upgraded) by certain credit rating agencies. As of ~~March 31,~~June 30, 2023, our weighted-average interest rate related to borrowings under the Revolving Credit Agreement was ~~7.6%~~7.7%.

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Receivables Financing Agreement

NuStar Energy and NuStar Finance LLC, a special purpose entity and wholly owned subsidiary of NuStar Energy, are parties to a $100.0 million receivables financing agreement with a third-party lender (the Receivables Financing Agreement) and agreements with certain of NuStar Energy’s wholly owned subsidiaries (collectively with the Receivables Financing Agreement, the Securitization Program). Under the Securitization Program, certain of NuStar Energy’s wholly owned subsidiaries sell their accounts receivable to NuStar Finance on an ongoing basis, and NuStar Finance provides the newly acquired accounts receivable as collateral for its revolving borrowings under the Receivables Financing Agreement. On June 29, 2023, we amended the Receivables Financing Agreement to extend the scheduled termination date from January 31, 2025 to July 1, 2026. As of June 30, 2023, the amount of borrowings outstanding under the Receivables Financing Agreement totaled $71.2 million, the interest rate related to outstanding borrowings was 6.7% and $108.2 million of our accounts receivable was included in the Securitization Program.

Fair Value of Long-Term Debt

The estimated fair values and carrying amounts of long-term debt, excluding finance leases, were as follows:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
		(Thousands of Dollars)					(Thousands of Dollars)
Fair value	Fair value	$	3,045,683	$	3,169,664	Fair value	$	3,250,699	$	3,169,664
Carrying amount	Carrying amount	$	3,062,362	$	3,242,289	Carrying amount	$	3,260,205	$	3,242,289

We have estimated the fair value 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 our other debt, for which a quoted market price is not 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 fair value hierarchy. The carrying amount includes unamortized debt issuance costs.

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 accrued ~~$0.6~~$1.3 million and $0.3 million for contingent losses as of ~~March 31,~~June 30, 2023 and December 31, 2022, 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. 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 have a material adverse effect on our results of operations, financial position or liquidity.

6. SERIES D CUMULATIVE CONVERTIBLE PREFERRED UNITS

~~In November 2022, we repurchased an aggregate 6,900,000 of our Series D Cumulative Convertible Preferred Units (Series D Preferred Units). The following is a summary~~Partial Redemptions

On May 25, 2023 and June 29, 2023, NuStar Energy L.P. notified the holders of our Series D Preferred Units ~~issued~~of our intent to exercise our right to redeem a portion of our outstanding Series D Preferred Units. The redemptions closed on June 30, 2023 and ~~outstanding:~~
Price per Unit Number of Units
June 29, 2018 issuance $ 25.38 15,760,441
July 13, 2018 issuance $ 25.38 7,486,209
Total units issued 23,246,650
November 22, 2022 repurchase $ 32.73 (6,900,000)
Units outstanding at March 31, 2023 and December 31, 2022 16,346,650
July 31, 2023, respectively, and were primarily funded with borrowings under our Revolving Credit Agreement, which had been partially paid down in the first quarter of 2023 with proceeds from the Sale-Leaseback Transaction. On the respective notification dates, those Series D Preferred Units became mandatorily redeemable; therefore, we reclassified those Series D Preferred Units from mezzanine equity to liability-classified “Mandatorily redeemable Series D preferred units” valued at the redemption price, excluding accrued distributions (Net Redemption Price). As of June 30, 2023, we presented the liability-classified Series D Preferred Units as non-current on our balance sheet as we had the intent and ability to refinance them on a long-term basis using our Revolving Credit Agreement. We recorded the difference between the carrying value of those Series D Preferred Units prior to reclassification and the Net Redemption Price as a deemed distribution, which reduced our common equity and reduced net income attributable to common units in the calculation of basic and diluted net income (loss) per common unit. At each closing, we accounted for the redemptions as extinguishments of debt. Distributions accrued for redeemed units from the notification dates to the redemption dates totaled $1.7 million for the three and six months ended June 30, 2023, and are reported in “Interest expense, net” on the condensed consolidated statements of comprehensive income.

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Information related to the redemptions is shown below (thousands of dollars, except date, unit and per unit data):


	June 30, 2023 Redemption		July 31, 2023 Redemption
Notification date	May 25, 2023		June 29, 2023

Units redeemed	5,500,000		2,560,000
Redemption price per unit, including accrued distributions	$	31.88	$	32.18
Redemption price, including accrued distributions	$	175,340	$	82,381
Accrued distributions	825		1,152
Net Redemption Price	$	174,515	$	81,229

Carrying value of units at notification date	$	152,467	$	71,210
Net Redemption Price	174,515		81,229
Loss to common limited partners attributable to redemption	$	(22,048)	$	(10,019)

Loss per common limited partner unit attributable to redemption	$	(0.20)	$	(0.09)

Distributions

We allocate net income to our Series D Preferred Units equal to the amount of distributions earned during the period. Distributions on the Series D 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 next business day) of each of March, June, September and December, beginning September 17, 2018, to holders of record on the first business day of each payment month. The distribution rates on the Series D Preferred Units are as follows: (i) 9.75% per annum ($0.619 per unit per distribution period) for the first two years; (ii) 10.75% per annum ($0.682 per unit per distribution period) for years three through five; and (iii) the

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

greater of 13.75% per annum ($0.872 per unit per distribution period) or the distribution per common unit thereafter. While the Series D Preferred Units are outstanding, the Partnership will be prohibited from paying distributions on any junior securities, including the common units, unless full cumulative distributions on the Series D Preferred Units (and any parity securities) have been, or contemporaneously are being, paid or set aside for payment through the most recent Series D Preferred Unit distribution payment date. Any Series D Preferred Unit distributions in excess of $0.635 per unit may be paid, in the Partnership’s sole discretion, in additional Series D Preferred Units, with the remainder paid in cash.

The distribution rate on our Series D Preferred Units increased on June 15, 2023, to the greater of 13.75% per annum ($0.872 per unit per distribution period) or the distribution per common unit. Total distribution excludes amounts reported in “Interest expense, net” as described above under “Partial Redemptions of Series D Preferred Units.” Distribution information on our Series D Preferred Units is as follows:


Distribution Period	Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Period	Distribution Rate per Unit		Total Distribution
				(Thousands of Dollars)					(Thousands of Dollars)
June 15, 2023 - September 14, 2023						June 15, 2023 - September 14, 2023	$	0.872	$	7,598	(a)
March 15, 2023 - June 14, 2023	March 15, 2023 - June 14, 2023	$	0.682	$	11,148	March 15, 2023 - June 14, 2023	$	0.682	$	10,315
December 15, 2022 - March 14, 2023	December 15, 2022 - March 14, 2023	$	0.682	$	11,148	December 15, 2022 - March 14, 2023	$	0.682	$	11,148

June 15, 2022 - September 14, 2022						June 15, 2022 - September 14, 2022	$	0.682	$	15,854
March 15, 2022 - June 14, 2022	March 15, 2022 - June 14, 2022	$	0.682	$	15,854	March 15, 2022 - June 14, 2022	$	0.682	$	15,854
December 15, 2021 - March 14, 2022	December 15, 2021 - March 14, 2022	$	0.682	$	15,854	December 15, 2021 - March 14, 2022	$	0.682	$	15,854

(a) Estimate is based on outstanding units after the July 31, 2023 redemption.

In ~~April~~July 2023, our board of directors declared distributions with respect to the Series D Preferred Units to be paid on ~~June~~September 15, 2023.

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Units Issued and Outstanding

The following is a summary of our Series D Preferred Units issued and outstanding:


	Transaction Date	Price per Unit	Number of Units
Issuance	June 29, 2018	$25.38	15,760,441
Issuance	July 13, 2018	$25.38	7,486,209
Total units issued			23,246,650
Repurchase	November 22, 2022	$32.73	(6,900,000)
Units outstanding as of December 31, 2022			16,346,650
Redemption	June 30, 2023	$31.88	(5,500,000)
Units outstanding as of June 30, 2023			10,846,650

As of June 30, 2023, we reported 2,560,000 of the Series D Preferred Units outstanding in “Mandatorily redeemable Series D preferred units” and 8,286,650 Series D Preferred Units in “Mezzanine Equity” on the consolidated balance sheets. After the July 31, 2023 redemption, 8,286,650 Series D Preferred Units remain outstanding.

7. PARTNERS' EQUITY

Series A, B and C Preferred Units

We allocate net income to our 8.50% Series A, 7.625% Series B and 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (collectively, the Series A, B and C Preferred Units) equal to the amount of distributions earned during the period. 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 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.

Information on our Series A, B and C Preferred Units is shown below:

Units

Units Issued and Outstanding as of ~~March 31,~~June 30, 2023

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 plus 6.766%

Series B Preferred Units

15,400,000

June 15, 2022

Three-month LIBOR plus 5.643%

Series C Preferred Units

6,900,000

December 15, 2022

Three-month LIBOR plus 6.88%

Distribution information on our Series A, B and C Preferred Units is as follows:


		Series A Preferred Units				Series B Preferred Units				Series C Preferred Units					Series A Preferred Units				Series B Preferred Units				Series C Preferred Units
Distribution Period	Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution
				(Thousands of Dollars)				(Thousands of Dollars)				(Thousands of Dollars)					(Thousands of Dollars)				(Thousands of Dollars)				(Thousands of Dollars)

June 15, 2023 - September 14, 2023 (a)														June 15, 2023 - September 14, 2023 (a)	$	0.76715	$	6,950	$	0.69696	$	10,733	$	0.77428	$	5,343
March 15, 2023 - June 14, 2023	March 15, 2023 - June 14, 2023	$	0.73169	$	6,629	$	0.66150	$	10,187	$	0.73881	$	5,098	March 15, 2023 - June 14, 2023	$	0.73169	$	6,629	$	0.66150	$	10,187	$	0.73881	$	5,098
December 15, 2022 - March 14, 2023	December 15, 2022 - March 14, 2023	$	0.71889	$	6,513	$	0.64871	$	9,990	$	0.72602	$	5,010	December 15, 2022 - March 14, 2023	$	0.71889	$	6,513	$	0.64871	$	9,990	$	0.72602	$	5,010

June 15, 2022 - September 14, 2022														June 15, 2022 - September 14, 2022	$	0.54808	$	4,966	$	0.47789	$	7,360	$	0.56250	$	3,881
March 15, 2022 - June 14, 2022	March 15, 2022 - June 14, 2022	$	0.47817	$	4,332	$	0.47657	$	7,339	$	0.56250	$	3,881	March 15, 2022 - June 14, 2022	$	0.47817	$	4,332	$	0.47657	$	7,339	$	0.56250	$	3,881
December 15, 2021 - March 14, 2022	December 15, 2021 - March 14, 2022	$	0.43606	$	3,951	$	0.47657	$	7,339	$	0.56250	$	3,881	December 15, 2021 - March 14, 2022	$	0.43606	$	3,951	$	0.47657	$	7,339	$	0.56250	$	3,881

(a) Total distributions are estimated based on the number of units outstanding as of June 30, 2023.

In ~~April~~July 2023, our board of directors declared distributions with respect to the Series A, B and C Preferred Units to be paid on ~~June~~September 15, 2023.

Common Limited Partners

We make quarterly distributions to common unitholders of 100% of our “Available Cash,” generally defined as cash receipts less cash disbursements, including distributions to our preferred units, and cash reserves established by the general partner, in

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

its sole discretion. These quarterly distributions are declared and paid within 45 days subsequent to each quarter-end. The common unitholders receive a distribution each quarter as determined by the board of directors, subject to limitation by the distributions in arrears, if any, on our preferred units. In ~~April~~July 2023, our board of directors declared distributions with respect to our common units for the quarter ended ~~March 31,~~June 30, 2023.

The following table summarizes information about cash distributions to our common limited partners applicable to the period in which the distributions were earned:

Quarter Ended

Cash Distributions
Per Unit

Total Cash
Distributions

Record Date

Payment Date

Quarter Ended

Cash Distributions
Per Unit

Total Cash
Distributions

Record Date

Payment Date

(Thousands of Dollars)

June 30, 2023

0.40

44,363

August 8, 2023

August 14, 2023

March 31, 2023

0.40

44,396

May 8, 2023

May 12, 2023

March 31, 2023

0.40

44,396

May 8, 2023

May 12, 2023

December 31, 2022

0.40

44,328

February 8, 2023

February 14, 2023

December 31, 2022

0.40

44,328

February 8, 2023

February 14, 2023

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,																	Three Months Ended June 30,
		2023								2022									2023								2022
		Foreign Currency Translation		Cash Flow Hedges		Pension and Other Postretirement Benefits		Total		Foreign Currency Translation		Cash Flow Hedges		Pension and Other Postretirement Benefits		Total			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)																	(Thousands of Dollars)
Balance as of January 1		$	62	$	(34,380)	$	2,713	$	(31,605)	$	(41,761)	$	(36,486)	$	4,269	$	(73,978)
Balance as of April 1																		Balance as of April 1	$	497	$	(33,865)	$	1,967	$	(31,401)	$	(40,932)	$	(35,957)	$	3,843	$	(73,046)
Other comprehensive income before reclassification adjustments	Other comprehensive income before reclassification adjustments	435		—		—		435		829		—		—		829		Other comprehensive income before reclassification adjustments	249		—		—		249		1,133		—		—		1,133

Sale of Point Tupper Terminal Operations reclassified into net income (Note 2)																		Sale of Point Tupper Terminal Operations reclassified into net income (Note 2)	—		—		—		—		39,646		—		—		39,646
Net gain on pension costs reclassified into other income, net	Net gain on pension costs reclassified into other income, net	—		—		(737)		(737)		—		—		(420)		(420)		Net gain on pension costs reclassified into other income, net	—		—		(736)		(736)		—		—		(420)		(420)
Net loss on cash flow hedges reclassified into interest expense, net	Net loss on cash flow hedges reclassified into interest expense, net	—		515		—		515		—		529		—		529		Net loss on cash flow hedges reclassified into interest expense, net	—		505		—		505		—		521		—		521
Other	Other	—		—		(9)		(9)		—		—		(6)		(6)		Other	—		—		(10)		(10)		—		—		(6)		(6)
Other comprehensive income (loss)	Other comprehensive income (loss)	435		515		(746)		204		829		529		(426)		932		Other comprehensive income (loss)	249		505		(746)		8		40,779		521		(426)		40,874
Balance as of March 31		$	497	$	(33,865)	$	1,967	$	(31,401)	$	(40,932)	$	(35,957)	$	3,843	$	(73,046)
Balance as of June 30																		Balance as of June 30	$	746	$	(33,360)	$	1,221	$	(31,393)	$	(153)	$	(35,436)	$	3,417	$	(32,172)

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)


	Six Months Ended June 30,
	2023								2022
	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	$	62	$	(34,380)	$	2,713	$	(31,605)	$	(41,761)	$	(36,486)	$	4,269	$	(73,978)
Other comprehensive income before reclassification adjustments	684		—		—		684		1,962		—		—		1,962
Sale of Point Tupper Terminal Operations reclassified into net income (Note 2)	—		—		—		—		39,646		—		—		39,646
Net gain on pension costs reclassified into other income, net	—		—		(1,473)		(1,473)		—		—		(840)		(840)
Net loss on cash flow hedges reclassified into interest expense, net	—		1,020		—		1,020		—		1,050		—		1,050
Other	—		—		(19)		(19)		—		—		(12)		(12)
Other comprehensive income (loss)	684		1,020		(1,492)		212		41,608		1,050		(852)		41,806
Balance as of June 30	$	746	$	(33,360)	$	1,221	$	(31,393)	$	(153)	$	(35,436)	$	3,417	$	(32,172)

As of ~~March 31,~~June 30, 2023, we expect to reclassify a loss of ~~$2.9~~$3.3 million to “Interest expense, net” within the next twelve months associated with unwound forward-starting interest rate swaps.

8. NET INCOME (LOSS) PER COMMON UNIT

Basic and diluted net income (loss) per common unit is determined pursuant to the two-class method. Under this method, all earnings are allocated to our limited partners and participating securities based on their respective rights to receive distributions earned during the period. Participating securities include restricted units awarded under our long-term incentive ~~plans.~~plans and, beginning on June 15, 2023, the Series D Preferred Units. We compute basic net income (loss) per common unit by dividing net income (loss) attributable to common units by the weighted-average number of common units outstanding during the period. We compute diluted net income (loss) per common unit by dividing net income (loss) attributable to common units by the sum of (i) the 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 common units include the Series D Preferred Units.

~~Table of Contents~~

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

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

The Series D Preferred Units contain certain unitholder conversion and redemption features, and we use the if-converted method to calculate the dilutive effect of the conversion or redemption feature that is most advantageous to our Series D preferred unitholders. The effect of the assumed conversion or redemption of the Series D Preferred Units outstanding was antidilutive for each of the three and six months ended ~~March 31,~~June 30, 2023 and 2022; therefore, we did not include such conversion in the computation of diluted net (loss) income ~~(loss)~~ per common unit.

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NUSTAR ENERGY L.P. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

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


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022					2023		2022		2023		2022
		(Thousands of Dollars, Except Unit and Per Unit Data)				(Thousands of Dollars, Except Unit and Per Unit Data)
Net income	Net income	$	105,936	$	12,312			Net income	$	46,141	$	59,199	$	152,077	$	71,511
Distributions to preferred limited partners	Distributions to preferred limited partners	(32,733)		(31,092)				Distributions to preferred limited partners	(32,126)		(31,523)		(64,859)		(62,615)
Distributions to common limited partners	Distributions to common limited partners	(44,396)		(44,165)				Distributions to common limited partners	(44,363)		(44,128)		(88,759)		(88,293)
Distribution equivalent rights to restricted units	Distribution equivalent rights to restricted units	(672)		(633)				Distribution equivalent rights to restricted units	(667)		(617)		(1,339)		(1,250)
Distributions less than (in excess of) income		$	28,135	$	(63,578)
Distributions in excess of income								Distributions in excess of income	$	(31,015)	$	(17,069)	$	(2,880)	$	(80,647)

Distributions to common limited partners	Distributions to common limited partners	$	44,396	$	44,165			Distributions to common limited partners	$	44,363	$	44,128	$	88,759	$	88,293
Allocation of distributions less than (in excess of) income to common limited partners		27,396		(63,578)
Allocation of distributions in excess of income to common limited partners								Allocation of distributions in excess of income to common limited partners	(31,015)		(17,069)		(2,880)		(80,647)
Series D Preferred Unit accretion	Series D Preferred Unit accretion	(3,671)		(4,581)				Series D Preferred Unit accretion	(3,303)		(4,734)		(6,974)		(9,315)
Net income (loss) attributable to common units		$	68,121	$	(23,994)
Series D Preferred Unit redemption								Series D Preferred Unit redemption	(32,067)		—		(32,067)		—
Net (loss) income attributable to common units								Net (loss) income attributable to common units	$	(22,022)	$	22,325	$	46,838	$	(1,669)

Basic and diluted weighted-average common units outstanding	Basic and diluted weighted-average common units outstanding	110,880,981		110,177,045				Basic and diluted weighted-average common units outstanding	110,905,471		110,306,641		110,893,293		110,242,201

Basic and diluted net income (loss) per common unit		$	0.61	$	(0.22)
Basic and diluted net (loss) income per common unit								Basic and diluted net (loss) income per common unit	$	(0.20)	$	0.20	$	0.42	$	(0.02)

9. SUPPLEMENTAL CASH FLOW INFORMATION

Changes in current assets and current liabilities were as follows:


		Three Months Ended March 31,					Six Months Ended June 30,
		2023		2022			2023		2022
		(Thousands of Dollars)					(Thousands of Dollars)
Decrease (increase) in current assets:	Decrease (increase) in current assets:					Decrease (increase) in current assets:
Accounts receivable	Accounts receivable	$	(131)	$	(13,704)	Accounts receivable	$	12,356	$	(21,262)

Inventories	Inventories	(121)		(3,062)		Inventories	4,920		1,439

Other current assets	Other current assets	8,326		10,289		Other current assets	(3,508)		705
Increase (decrease) in current liabilities:	Increase (decrease) in current liabilities:					Increase (decrease) in current liabilities:
Accounts payable	Accounts payable	7,413		4,284		Accounts payable	(2,427)		5,082

Accrued interest payable	Accrued interest payable	38,505		37,968		Accrued interest payable	869		567
Accrued liabilities	Accrued liabilities	(18,228)		(14,178)		Accrued liabilities	(8,300)		(14,448)
Taxes other than income tax	Taxes other than income tax	(3,150)		(4,085)		Taxes other than income tax	(2,125)		(3,023)

Changes in current assets and current liabilities	Changes in current assets and current liabilities	$	32,614	$	17,512	Changes in current assets and current liabilities	$	1,785	$	(30,940)

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

•the change in the amount accrued for capital expenditures;

•the effect of accrued compensation expense paid with fully vested common unit awards; and

•current assets and current liabilities disposed of during the period.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Other supplemental cash flow information is as follows:


		Three Months Ended March 31,					Six Months Ended June 30,
		2023		2022			2023		2022
		(Thousands of Dollars)					(Thousands of Dollars)
Cash paid for interest, net of amount capitalized	Cash paid for interest, net of amount capitalized	$	16,600	$	9,320	Cash paid for interest, net of amount capitalized	$	110,195	$	95,112
(Refunds received) cash paid for income taxes, net		$	(1,126)	$	185
Cash paid for income taxes, net of tax refunds received						Cash paid for income taxes, net of tax refunds received	$	2,842	$	3,646
Right-of-use assets obtained in exchange for operating lease liabilities	Right-of-use assets obtained in exchange for operating lease liabilities	$	82,364	$	2,674	Right-of-use assets obtained in exchange for operating lease liabilities	$	82,372	$	2,990
Right-of-use assets obtained in exchange for finance lease liabilities	Right-of-use assets obtained in exchange for finance lease liabilities	$	844	$	731	Right-of-use assets obtained in exchange for finance lease liabilities	$	1,818	$	1,342

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 restricted cash” on the consolidated statements of cash flows is included in the consolidated balance sheets as follows:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
		(Thousands of Dollars)					(Thousands of Dollars)
Cash and cash equivalents	Cash and cash equivalents	$	5,151	$	14,489	Cash and cash equivalents	$	3,813	$	14,489

Other long-term assets, net	Other long-term assets, net	8,966		8,888		Other long-term assets, net	9,056		8,888
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash	$	14,117	$	23,377	Cash, cash equivalents and restricted cash	$	12,869	$	23,377

10. SEGMENT INFORMATION

Our reportable business segments consist of the pipeline, storage and fuels 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, ~~(loss),~~ 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.

Results of operations for the reportable segments were as follows:


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022					2023		2022		2023		2022
		(Thousands of Dollars)				(Thousands of Dollars)
Revenues:	Revenues:							Revenues:

Pipeline	Pipeline	$	213,183	$	188,683			Pipeline	$	206,701	$	200,565	$	419,884	$	389,248

Storage	Storage	80,657		87,921				Storage	78,209		88,783		158,866		176,704

Fuels marketing	Fuels marketing	100,027		133,260				Fuels marketing	93,426		140,809		193,453		274,069

Consolidation and intersegment eliminations	Consolidation and intersegment eliminations	—		(1)				Consolidation and intersegment eliminations	(2)		—		(2)		(1)
Total revenues	Total revenues	$	393,867	$	409,863			Total revenues	$	378,334	$	430,157	$	772,201	$	840,020

Operating income (loss):
Operating income:								Operating income:
Pipeline	Pipeline	$	119,858	$	95,752			Pipeline	$	107,804	$	100,953	$	227,662	$	196,705
Storage	Storage	22,766		(14,975)				Storage	21,213		31,207		43,979		16,232
Fuels marketing	Fuels marketing	6,566		6,544				Fuels marketing	6,510		6,631		13,076		13,175

Total segment operating income	Total segment operating income	149,190		87,321				Total segment operating income	135,527		138,791		284,717		226,112
Gain on sale of assets	Gain on sale of assets	41,075		—				Gain on sale of assets	—		—		41,075		—
General and administrative expenses	General and administrative expenses	28,725		27,071				General and administrative expenses	31,620		27,909		60,345		54,980
Other depreciation and amortization expense	Other depreciation and amortization expense	1,555		1,824				Other depreciation and amortization expense	1,037		1,823		2,592		3,647
Total operating income	Total operating income	$	159,985	$	58,426			Total operating income	$	102,870	$	109,059	$	262,855	$	167,485

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Total assets by reportable segment were as follows:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
		(Thousands of Dollars)					(Thousands of Dollars)
Pipeline	Pipeline	$	3,324,780	$	3,360,685	Pipeline	$	3,304,918	$	3,360,685
Storage	Storage	1,409,926		1,438,609		Storage	1,410,647		1,438,609
Fuels marketing	Fuels marketing	44,620		37,763		Fuels marketing	29,045		37,763
Total segment assets	Total segment assets	4,779,326		4,837,057		Total segment assets	4,744,610		4,837,057
Other partnership assets	Other partnership assets	144,388		136,629		Other partnership assets	145,805		136,629
Total consolidated assets	Total consolidated assets	$	4,923,714	$	4,973,686	Total consolidated assets	$	4,890,415	$	4,973,686

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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 INFORMATION

In this Form 10-Q, we make certain forward-looking statements, such as statements regarding our plans, strategies, objectives, expectations, estimates, predictions, projections, assumptions, intentions, resources and the future impact of economic activity and the actions by oil-producing nations on our business. 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, which may cause actual results to differ materially. Please read Item 1A. “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2022, as well as additional information provided from time to time in our subsequent filings with the Securities and 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.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented in four sections:

•Overview, including Trends and Outlook

•Results of Operations

•Liquidity and Capital Resources

•Critical Accounting Policies

OVERVIEW

NuStar Energy L.P. (NYSE: NS) is primarily engaged in the transportation, terminalling and storage of petroleum products and renewable fuels and the transportation of anhydrous ammonia. We also market petroleum products. Our business is managed under the direction of the board of directors of NuStar GP, LLC, the general partner of our general partner, Riverwalk Logistics, L.P., both of which are wholly owned subsidiaries of ours.

Our operations consist of three reportable business segments: pipeline, storage and fuels marketing. As of ~~March 31,~~June 30, 2023, our assets included ~~9,465~~9,475 miles of pipeline and 63 terminal and storage facilities, which provided approximately 49 million barrels of 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.

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;

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•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 transported by and/or stored in our assets and the demand for products we sell.

Recent ~~Development~~Developments

~~Sale-leaseback.~~Partial Redemptions of Series D Preferred Units. On June 30, 2023, we redeemed an aggregate 5,500,000 of our Series D Cumulative Convertible Preferred Units (Series D Preferred Units), at a price per unit of $31.88, for an aggregate purchase price of $175.3 million. On June 29, 2023, NuStar Energy L.P. notified the holders of our Series D Preferred Units of our intent to exercise our right to redeem an aggregate 2,560,000 of our Series D Preferred Units, at a price per unit of $32.18 for an aggregate purchase price of $82.4 million. This redemption closed on July 31, 2023. The redemptions in June and July were primarily funded with borrowings under our $1.0 billion unsecured revolving credit agreement. For the three and six months ended June 30, 2023, we recorded an aggregate $0.29 loss per common unit attributable to the redemptions. Please see Note 6 of the Condensed Notes to the Consolidated Financial Statements in Item 1. "Financial Statements" for additional information on these transactions.

Sale-leaseback Transaction. On March 21, 2023, we consummated a sale-leaseback transaction with respect to our corporate headquarters facility and approximately 24 acres of underlying land located in San Antonio, Texas (the Corporate Headquarters) for approximately $103.0 million and recognized a gain of $41.1 million. We entered into the sale-leaseback transaction in order to monetize the Corporate Headquarters and used the proceeds to repay borrowings on our revolving credit agreement. Please refer to Note 2 of the Condensed Notes to the Consolidated Financial Statements in Item 1. "Financial Statements" for additional information.

Other Event

Point Tupper Terminal Disposition. On April 29, 2022, we sold the equity interests in our wholly owned subsidiaries that owned our Point Tupper terminal facility in Nova Scotia, Canada (the Point Tupper Terminal Operations) to EverWind Fuels for $60.0 million (the Point Tupper Terminal Disposition). The terminal facility had a storage capacity of 7.8 million barrels and was included in the storage segment. We recognized a non-cash, pre-tax impairment loss of $46.1 million in the first quarter of 2022 and a non-cash gain on the sale of $1.6 million in the second quarter of 2022. Please refer to Note 2 of the Condensed Notes to the Consolidated Financial Statements in Item 1. "Financial Statements" for additional information.

Trends and Outlook

In 2023, we are continuing to execute our plan to strengthen our balance sheet, and in the first quarter of 2023, we completed the sale-leaseback of our Corporate Headquarters for about $103.0 million of cash, as described above. We deployed the proceeds to reduce our debt balance, which ~~will facilitate~~facilitated our redemption of a portion of ~~the~~our Series D ~~Cumulative Convertible~~ Preferred Units ~~(Series D Preferred Units) later this year.~~in June and July 2023, as described above. For the full-year 2023, we expect to fund all of our expenses, distribution requirements and capital expenditures using internally generated cash flows, as we did in 2022 and 2021. We will continue to evaluate sources of liquidity to facilitate the planned redemption of the remaining Series D Preferred Units, ~~in 2023 and 2024,~~ which iswe expect to complete several years ahead of the holders’ redemption option in 2028. We plan to continue to manage our operations with fiscal discipline in order to best maximize unitholder value.

InFor the remainder of 2023, we expect most of our pipeline systems to benefit from the positive revenue ~~impact~~impacts of our tariff indexation increases effective in July 2022 ~~as well as the increases we expect in~~and July 2023, which is an important counterbalance to the impact of inflation on our business. ~~We also expect throughputs and revenues to increase, year-over-year, across most of our pipeline systems.~~

While many terminals in our storage segment are somewhat insulated from demand volatility due to 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 and continued crude oil price backwardation. Conversely, we expect our West Coast region to continue to benefit in 2023 from the completion of renewable fuel projects, which continue to expand the capacity of our renewable fuels distribution system and further solidify the significant role NuStar plays in facilitating California’s transition to low-carbon renewable fuels.

~~If we see~~

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Economic metrics thus far in 2023 have indicated a ~~continuation or acceleration~~slowing in inflationary pressures that were prevalent in 2021 and 2022. However, the current mix of ~~2022’s inflationary~~uncertain market conditions, rising interest rates, supply chain disruptions and tight labor markets ~~then we may also~~could cause us to see higher costs of operating our assets and executing on our capital projects in 2023. In an effort to curb inflation, ~~amidst the backdrop of the Russia-Ukraine conflict, existing supply chain constraints, and the global economic recovery,~~ the U.S. Federal Reserve (the Fed) raised interest rates ~~several times~~ in 2022 and continued to do so in ~~early~~ 2023. The Fed may implement additional increases in 2023, which will increase the cost of our variable-rate debt, as well as the cost of our 8.50% Series A, 7.625% Series B and 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, which have distribution rates that increase or decrease along with current interest rates. On the other hand, our ability to pass along rate increases reflecting changes in producer and/or consumer price indices to our customers, under our tariffs and contracts, should help to counterbalance the impact of inflation on our costs. Additionally, we expect to further mitigate the impact of inflation in 2023 through our expense optimization initiative we began in early 2022.

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. These factors include, but are not limited to, the ~~lingering impact of the COVID-19 pandemic or other health crises; war and other armed conflicts; actions of oil-producing nations; the~~ state of the economy and the capital markets; the impact of health crises; war and other armed conflicts; changes to our customers’ refinery maintenance schedules and

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unplanned refinery downtime; actions of oil-producing nations; crude oil prices; the supply of and demand for petroleum products, renewable fuels and anhydrous ammonia; demand for our transportation and storage services; the availability and costs of personnel, equipment, supplies and services essential to our operations; the ability to obtain timely permitting approvals; and changes in laws and regulations affecting our operations.

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RESULTS OF OPERATIONS

Consolidated Results of Operations

Three Months Ended ~~March 31,~~June 30, 2023 Compared to Three Months Ended ~~March 31,~~June 30, 2022


		Three Months Ended March 31,				Change			Three Months Ended June 30,				Change
		2023		2022					2023		2022
		(Unaudited, Thousands of Dollars, Except Per Unit Data)							(Unaudited, Thousands of Dollars, Except Per Unit Data)
Statement of Income Data:	Statement of Income Data:							Statement of Income Data:
Revenues:	Revenues:							Revenues:
Service revenues	Service revenues	$	285,266	$	265,305	$	19,961	Service revenues	$	275,367	$	278,067	$	(2,700)
Product sales	Product sales	108,601		144,558		(35,957)		Product sales	102,967		152,090		(49,123)
Total revenues	Total revenues	393,867		409,863		(15,996)		Total revenues	378,334		430,157		(51,823)

Costs and expenses:	Costs and expenses:							Costs and expenses:
Costs associated with service revenues	Costs associated with service revenues	151,216		149,705		1,511		Costs associated with service revenues	155,893		157,188		(1,295)
Costs associated with product sales	Costs associated with product sales	93,461		126,715		(33,254)		Costs associated with product sales	86,914		134,178		(47,264)

Impairment loss		—		46,122		(46,122)

General and administrative expenses	General and administrative expenses	28,725		27,071		1,654		General and administrative expenses	31,620		27,909		3,711
Other depreciation and amortization expense	Other depreciation and amortization expense	1,555		1,824		(269)		Other depreciation and amortization expense	1,037		1,823		(786)

Total costs and expenses	Total costs and expenses	274,957		351,437		(76,480)		Total costs and expenses	275,464		321,098		(45,634)

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

Operating income	Operating income	159,985		58,426		101,559		Operating income	102,870		109,059		(6,189)

Interest expense, net	Interest expense, net	(57,371)		(49,818)		(7,553)		Interest expense, net	(58,170)		(50,941)		(7,229)

Other income, net	Other income, net	4,509		3,671		838		Other income, net	2,633		2,012		621
Income before income tax expense (benefit)		107,123		12,279		94,844
Income tax expense (benefit)		1,187		(33)		1,220
Income before income tax expense								Income before income tax expense	47,333		60,130		(12,797)
Income tax expense								Income tax expense	1,192		931		261

Net income	Net income	$	105,936	$	12,312	$	93,624	Net income	$	46,141	$	59,199	$	(13,058)

Basic and diluted net income (loss) per common unit		$	0.61	$	(0.22)	$	0.83
Basic and diluted net (loss) income per common unit								Basic and diluted net (loss) income per common unit	$	(0.20)	$	0.20	$	(0.40)

Consolidated ~~Overview.~~ Overview

Net income ~~increased $93.6~~decreased $13.1 million for the three months ended ~~March 31,~~June 30, 2023, compared to the three months ended ~~March 31,~~June 30, 2022, mainly due to lower operating income of $6.2 million and higher interest expense of $7.2 million. Operating income declined primarily due to lower operating income from our storage segment and higher general and administrative expenses, partially offset by higher operating income from our pipeline segment, as further discussed below.

General and administrative expenses increased $3.7 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, mainly due to an increase in rent expense of $2.0 million related to the Corporate Headquarters following the sale-leaseback transaction in the first quarter of 2023 and higher compensation expenses.

Interest expense, net, increased $7.2 million for the three months ended June 30, 2023, compared to the three months ended June 30, 2022, primarily due to higher interest rates on our variable-rate debt in 2023.

Basic and diluted net (loss) income per common unit: In the second quarter of 2023, we notified the holders of our Series D Preferred Units of our intent to redeem a portion of the Series D Preferred Units outstanding, and we recognized an aggregate loss of $0.29 per common unit for the three months ended June 30, 2023, related to these redemptions. Please see Notes 6 and 8 of the Condensed Notes to the Consolidated Financial Statements in Item 1. "Financial Statements" for additional information.

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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022


	Six Months Ended June 30,				Change
	2023		2022
	(Unaudited, Thousands of Dollars, Except Per Unit Data)
Statement of Income Data:
Revenues:
Service revenues	$	560,633	$	543,372	$	17,261
Product sales	211,568		296,648		(85,080)
Total revenues	772,201		840,020		(67,819)

Costs and expenses:
Costs associated with service revenues	307,109		306,893		216
Cost associated with product sales	180,375		260,893		(80,518)

Impairment loss	—		46,122		(46,122)
General and administrative expenses	60,345		54,980		5,365
Other depreciation and amortization expense	2,592		3,647		(1,055)

Total costs and expenses	550,421		672,535		(122,114)

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

Operating income	262,855		167,485		95,370

Interest expense, net	(115,541)		(100,759)		(14,782)


Other income, net	7,142		5,683		1,459
Income before income tax expense	154,456		72,409		82,047
Income tax expense	2,379		898		1,481


Net income	$	152,077	$	71,511	$	80,566

Basic and diluted net income (loss) per common unit	$	0.42	$	(0.02)	$	0.44

Consolidated Overview

Net income increased $80.6 millionfor the six months ended June 30, 2023, compared to the six months ended June 30, 2022, mainly due to higher operating income of $95.4 million, partially offset by an increase in interest expense, net of $14.8 million. Operating income increased primarily due to a gain of $41.1 million related to the sale-leaseback transaction of the Corporate Headquarters ~~and higher operating income from our pipeline segment of $24.1 million, both~~ in the first quarter of 2023, ~~as well as~~ a non-cash, pre-tax impairment loss of $46.1 million in the first quarter of ~~2022.~~2022 and higher operating income from our pipeline segment in the first half of 2023, partially offset by lower revenues from our storage segment in the first half of 2023.

~~Corporate Items.~~General and administrative expenses increased ~~$1.7~~$5.4 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022, mainly due to an increase in rent expense of $2.2 million related to the Corporate Headquarters following the sale-leaseback transaction in the first quarter of 2023 and higher compensation ~~and various other~~ expenses.

Interest expense, net, increased ~~$7.6~~$14.8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022, primarily due to higher interest rates on our variable-rate debt in 2023.

Basic and diluted net income (loss) per common unit: In the second quarter of 2023, we notified the holders of our Series D Preferred Units of our intent to redeem a portion of the Series D Preferred Units outstanding, and we recognized an aggregate loss of $0.29 per common unit for the six months ended June 30, 2023, related to these redemptions. Please see Notes 6 and 8 of the Condensed Notes to the Consolidated Financial Statements in Item 1. "Financial Statements" for additional information.

1824

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Pipeline Segment

As of ~~March 31,~~June 30, 2023, our pipeline assets consist of ~~9,465~~9,475 miles of pipeline with 33 terminals and 13.0 million barrels of storage capacity. Our Central West System includes ~~2,920~~2,915 miles of refined product pipelines and ~~2,050~~2,065 miles of crude oil pipelines. In addition, our Central East System includes 2,495 miles of refined product pipelines, consisting of the East and North Pipelines, and aan approximately 2,000-mile ammonia pipeline (the Ammonia Pipeline). We charge tariffs on a per barrel basis for transportation in our refined product and crude oil pipelines and on a per ton basis for transportation 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,~~June 30, 2023 Compared to Three Months Ended ~~March 31,~~June 30, 2022


		Three Months Ended March 31,				Change			Three Months Ended June 30,				Change
		2023		2022					2023		2022
		(Thousands of Dollars, Except Barrels/Day Information)							(Thousands of Dollars, Except Barrels/Day Information)
Pipeline Segment:	Pipeline Segment:							Pipeline Segment:
Crude oil pipelines throughput (barrels/day)	Crude oil pipelines throughput (barrels/day)	1,325,282		1,309,085		16,197		Crude oil pipelines throughput (barrels/day)	1,111,120		1,220,758		(109,638)
Refined products and ammonia pipelines throughput (barrels/day)	Refined products and ammonia pipelines throughput (barrels/day)	595,622		563,248		32,374		Refined products and ammonia pipelines throughput (barrels/day)	597,162		582,182		14,980
Total throughput (barrels/day)	Total throughput (barrels/day)	1,920,904		1,872,333		48,571		Total throughput (barrels/day)	1,708,282		1,802,940		(94,658)

Throughput and other revenues	Throughput and other revenues	$	213,183	$	188,683	$	24,500	Throughput and other revenues	$	206,701	$	200,565	$	6,136
Operating expenses	Operating expenses	49,775		48,103		1,672		Operating expenses	55,042		55,170		(128)
Depreciation and amortization expense	Depreciation and amortization expense	43,550		44,828		(1,278)		Depreciation and amortization expense	43,855		44,442		(587)

Segment operating income	Segment operating income	$	119,858	$	95,752	$	24,106	Segment operating income	$	107,804	$	100,953	$	6,851

Pipeline segment revenues increased ~~$24.5~~$6.1 million, ~~and~~despite a decrease in throughputs ~~increased 48,571~~of 94,658 barrels per day for the three months ended ~~March 31,~~June 30, 2023, compared to the three months ended ~~March 31,~~June 30, 2022, mainly due to the following:

•an increase in revenues of ~~$7.2~~$7.0 million and an increase in throughputs of ~~23,319~~40,617 barrels per day on our ~~Permian Crude~~McKee System ~~mainly~~pipelines, primarily due to ~~increased customer production supplying this system and more barrels moved~~operational issues at a customer’s refinery in 2022, as well as higher ~~average tariffs~~demand on most of our pipelines in the ~~first~~second quarter of ~~2023. However, these increases were partially offset by decreased~~2023;

•an increase in revenues of ~~$2.2~~$1.3 million, ~~from lower commodity prices~~despite comparable throughputs on ~~PLA volumes sold in the first quarter of 2023, compared~~our Valley Pipeline, due to the ~~first quarter~~timing of recognizing minimum volume commitment settlements with customers and the tariff indexation increases effective in July 2022;

•an increase in revenues of ~~$6.8~~$1.1 million, despite comparable throughputs on our Ammonia Pipeline, due to the tariff indexation increases effective in July 2022;

•throughputs decreased 20,474 barrels per day on our Permian Crude System, due to decreased customer production supplying this system, while revenues remained comparable due to the tariff indexation increases effective in July 2022;

•a decrease in revenues of $1.9 million and a decrease in throughputs of 45,446 barrels per day on the Ardmore System, due to a turnaround at a customer’s refinery in the second quarter of 2023; and

•a decrease in revenues of $1.5 million and a decrease in throughputs of 62,444 barrels per day on our Corpus Christi Crude Pipeline System, mainly due to unfavorable market conditions and reductions in minimum volume commitments, while increased volumes on certain pipelines in this system in the second quarter of 2023 partially offset the overall decreases.

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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022


	Six Months Ended June 30,				Change
	2023		2022
	(Thousands of Dollars, Except Barrels/Day Information)
Pipeline Segment:
Crude oil pipelines throughput (barrels/day)	1,217,610		1,264,678		(47,068)
Refined products and ammonia pipelines throughput (barrels/day)	596,396		572,767		23,629
Total throughput (barrels/day)	1,814,006		1,837,445		(23,439)

Throughput and other revenues	$	419,884	$	389,248	$	30,636
Operating expenses	104,817		103,273		1,544
Depreciation and amortization expense	87,405		89,270		(1,865)


Segment operating income	$	227,662	$	196,705	$	30,957

Pipeline segment revenues increased $30.6 million, despite a decrease in throughputs of 23,439 barrels per day for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, mainly due to the following:

•an increase in revenues of $13.8 million and an increase in throughputs of ~~46,724~~43,657 barrels per day on our McKee System pipelines, primarily due to operational issues at a customer’s refinery in 2022, as well as higher demand on our pipeline serving the Denver, Colorado market in 2023;

•an increase in revenues of ~~$4.2~~$7.2 million, despite comparable throughputs on our Central East System, mainly due to the tariff indexation increases effective in July 2022;

•an increase in revenues of $7.1 million, despite comparable throughputs on our Permian Crude System, mainly due to more barrels moved at higher average tariffs in the first half of 2023 and ~~North pipelines combined, mainly~~the tariff indexation increases effective in July 2022; these increases were partially offset by a decrease of $2.9 million due to lower commodity prices on PLA volumes sold;

•an increase in revenues of $2.9 million and an increase in throughputs of 1,953 barrels per day on our Valley Pipeline, due to higher demand in the ~~first quarter~~markets served by this pipeline in 2023, the timing of ~~2023~~recognizing minimum volume commitment settlements with customers and the tariff indexation increases ~~which were~~ effective in July ~~2022. However, throughputs decreased 4,489 barrels per day, mainly due to maintenance activity at a customer’s refinery in the first quarter of 2023;~~2022;

•an increase in revenues of $2.1 million and an increase in throughputs of ~~1,557 barrels per day on our Ammonia Pipeline, mainly due to unfavorable market conditions in 2022;~~

•~~an increase in revenues of $1.9 million and an increase in throughputs of 7,808~~1,312 barrels per day on our Three Rivers System, ~~primarily~~mainly due to ~~an increase~~pipeline expansions that were placed in ~~demand~~service in ~~the markets served by this system in the first quarter of 2023;~~July 2022;

•~~an increase~~a decrease in revenues of ~~$1.6~~$2.7 million and ~~an increase~~a decrease in throughputs of ~~4,264~~22,388 barrels per day on ~~our Valley Pipeline, mainly~~the Ardmore System due to ~~higher demand~~a turnaround at a customer’s refinery in the ~~markets served by this pipeline in the first~~second quarter of 2023; and

•~~an increase~~a decrease in ~~revenues~~throughputs of ~~$1.3 million~~45,944 barrels per day on our Corpus Christi Crude Pipeline System, mainly due to unfavorable market conditions and reductions in minimum volume commitments, while increased volumes on certain ~~of our~~ pipelines in this system ~~despite lower overall throughputs~~in the first half of ~~29,262 barrels per day.~~

~~Operating expenses increased $1.7 million for the three months ended March 31,~~ 2023 ~~compared~~kept revenues comparable to the ~~three months ended March 31, 2022, primarily due to an increase in maintenance and regulatory expenses of $0.8 million and an increase in power costs of $0.7 million.~~same period last year.

Depreciation and amortization expense decreased ~~$1.3~~$1.9 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022, mainly due to more fully depreciated assets.

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Storage Segment

Our storage segment is composed of our facilities that provide storage, handling and other services for refined products, crude oil, specialty chemicals, renewable fuels and other liquids. As of ~~March 31,~~June 30, 2023, we owned and operated 29 terminal and storage facilities in the U.S. and one terminal in Nuevo Laredo, Mexico, with an aggregate storage capacity of 36.4 million barrels. Revenues for the storage segment include fees for tank storage agreements, 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, under which a customer pays a fee per barrel for volumes moved through our terminals (throughput terminal revenues).

Point Tupper Terminal Disposition. In the first quarter of 2022, we recorded a non-cash, pre-tax impairment loss of $46.1 million related to our Point Tupper Terminal Operations, which were sold on April 29, 2022.

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Three Months Ended ~~March 31,~~June 30, 2023 Compared to Three Months Ended ~~March 31,~~June 30, 2022


		Three Months Ended March 31,				Change			Three Months Ended June 30,				Change
		2023		2022					2023		2022
		(Thousands of Dollars, Except Barrels/Day Information)							(Thousands of Dollars, Except Barrels/Day Information)
Storage Segment:	Storage Segment:							Storage Segment:
Throughput (barrels/day) (a)	Throughput (barrels/day) (a)	502,717		482,526		20,191		Throughput (barrels/day) (a)	391,495		446,057		(54,562)

Throughput terminal revenues	Throughput terminal revenues	$	27,315	$	26,441	$	874	Throughput terminal revenues	$	23,839	$	30,929	$	(7,090)
Storage terminal revenues	Storage terminal revenues	53,342		61,480		(8,138)		Storage terminal revenues	54,370		57,854		(3,484)
Total revenues	Total revenues	80,657		87,921		(7,264)		Total revenues	78,209		88,783		(10,574)
Operating expenses	Operating expenses	39,387		38,299		1,088		Operating expenses	38,321		39,778		(1,457)
Depreciation and amortization expense	Depreciation and amortization expense	18,504		18,475		29		Depreciation and amortization expense	18,675		17,798		877

Impairment loss		—		46,122		(46,122)
Segment operating income (loss)		$	22,766	$	(14,975)	$	37,741

Segment operating income								Segment operating income	$	21,213	$	31,207	$	(9,994)

(a)Prior period throughputs for our Corpus Christi North Beach terminal were restated consistent with current period presentation.

Throughput terminal revenues ~~increased $0.9~~decreased $7.1 million and throughputs ~~increased 20,191~~decreased 54,562 barrels per day for the three months ended ~~March 31,~~June 30, 2023, compared to the three months ended ~~March 31,~~June 30, 2022, mainly due to a decrease in revenues of $9.0 million and a decrease in throughputs of 68,431 barrels per day at our Corpus Christi North Beach terminal, due to unfavorable market conditions and reductions in minimum volume commitments. The overall decrease was partially offset by an increase in revenues of ~~$1.5~~$1.9 million and an increase in throughputs of ~~17,444~~13,869 barrels per day on our Central West Terminals due to higher ~~demand.~~demand in the second quarter of 2023.

Storage terminal revenues decreased ~~$8.1~~$3.5 million for the three months ended ~~March 31,~~June 30, 2023, compared to the three months ended ~~March 31,~~June 30, 2022, primarily due to:

•a decrease in revenues of ~~$9.7~~$10.3 million at our St. James terminal due to customers not renewing expiring contracts in the current backwardated ~~market, partially offset by higher reimbursable revenues;~~market; and

•a decrease in revenues of ~~$7.8~~$1.8 million due to the Point Tupper Terminal Disposition in April 2022.

These decreases were partially offset by an increase in revenues of ~~$8.3~~$7.5 million at our West Coast Terminals, ~~mainly at our Stockton, Portland and Selby terminals,~~ primarily due to new contracts, rate escalations and higher throughput and handling fees.

Operating expenses ~~increased $1.1~~decreased $1.5 million for the three months ended ~~March 31,~~June 30, 2023, compared to the three months ended ~~March 31,~~June 30, 2022, primarily due to ~~the following:~~

•an increase in reimbursable expenses of $4.2 million, mainly due to tank cleaning at our Corpus Christi North Beach and St. James terminals in 2023 and increased customer activity at our West Coast terminals; and

•~~an increase in maintenance and regulatory expenses of $3.0 million, primarily due to tank cleaning at our St. James terminal, as well as minor maintenance activity across various terminals.~~

~~These increases were partially offset by~~ a decrease in operating expenses of ~~$6.0~~$1.8 million due to the Point Tupper Terminal Disposition in April 2022.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022


	Six Months Ended June 30,				Change
	2023		2022
	(Thousands of Dollars, Except Barrels/Day Information)
Storage Segment:
Throughput (barrels/day) (a)	446,798		464,191		(17,393)

Throughput terminal revenues	$	51,154	$	57,370	$	(6,216)
Storage terminal revenues	107,712		119,334		(11,622)
Total revenues	158,866		176,704		(17,838)
Operating expenses	77,708		78,077		(369)
Depreciation and amortization expense	37,179		36,273		906

Impairment loss	—		46,122		(46,122)
Segment operating income	$	43,979	$	16,232	$	27,747

(a)Prior period throughputs for our Corpus Christi North Beach terminal were restated consistent with current period presentation.

Throughput terminal revenues decreased $6.2 million and throughputs decreased 17,393 barrels per day for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily due to a decrease in revenues of $9.6 million

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and a decrease in throughputs of 33,039 barrels per day at our Corpus Christi North Beach terminal, mainly due to unfavorable market conditions and reductions in minimum volume commitments. These decreases were partially offset by an increase in revenues of $3.4 million and an increase in throughputs of 15,646 barrels per day at our Central West Terminals, primarily due to higher demand in the first half of 2023 and operating issues at a customer’s refinery in 2022.

Storage terminal revenues decreased $11.6 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily due to the following:

•a decrease in revenues of $20.0 million at our St. James terminal due to customers not renewing expiring contracts in the current backwardated market; and

•a decrease in revenues of $9.6 million due to the Point Tupper Terminal Disposition in April 2022.

These decreases were partially offset by the following:

•an increase in revenues of $15.8 million at our West Coast Terminals, primarily due to new contracts, rate escalations and higher throughput and handling fees; and

•an increase in revenues of $1.1 million due to rate escalations on our refinery storage tanks.

Operating expenses decreased $0.4 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily due to an aggregate decrease in operating expenses of $7.9 million due to the Point Tupper Terminal Disposition in April 2022, mostly offset by increases in reimbursable expenses of $3.7 million and maintenance and regulatory expenses of $3.4 million, across various terminals.

Fuels Marketing Segment

The fuels marketing segment mainly includes our bunkering operations in the Gulf Coast, as well as 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. The financial impacts of the derivative financial instruments associated with commodity price risk were not material for any periods presented.

Three Months Ended ~~March 31,~~June 30, 2023 Compared to Three Months Ended ~~March 31,~~June 30, 2022


		Three Months Ended March 31,				Change			Three Months Ended June 30,				Change
		2023		2022					2023		2022
		(Thousands of Dollars)							(Thousands of Dollars)
Fuels Marketing Segment:	Fuels Marketing Segment:							Fuels Marketing Segment:
Product sales	Product sales	$	100,027	$	133,260	$	(33,233)	Product sales	$	93,426	$	140,809	$	(47,383)
Cost of goods	Cost of goods	93,186		126,123		(32,937)		Cost of goods	86,349		133,741		(47,392)
Gross margin	Gross margin	6,841		7,137		(296)		Gross margin	7,077		7,068		9
Operating expenses	Operating expenses	275		593		(318)		Operating expenses	567		437		130

Segment operating income	Segment operating income	$	6,566	$	6,544	$	22	Segment operating income	$	6,510	$	6,631	$	(121)

Segment operating income was comparable for the three months ended ~~March 31,~~June 30, 2023 and the three months ended ~~March 31, 2022, mainly due to an increase of $1.7 million in~~June 30, 2022. Higher blending gross margins of $2.1 million from ~~our blending sales,~~lower fuel costs were offset by a decrease of ~~$1.0~~$1.2 million in gross margins from our bunkering operations due to lower fuel prices and a decrease of ~~$1.0~~$0.9 million in other product sales.

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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022


	Six Months Ended June 30,				Change
	2023		2022
	(Thousands of Dollars)
Fuels Marketing Segment:
Product sales	$	193,453	$	274,069	$	(80,616)
Cost of goods	179,535		259,864		(80,329)
Gross margin	13,918		14,205		(287)
Operating expenses	842		1,030		(188)


Segment operating income	$	13,076	$	13,175	$	(99)

Segment operating income was comparable for the six months ended June 30, 2023 and the six months ended June 30, 2022. Higher blending gross margins of $3.8 million from lower fuel costs were offset by a decrease of $2.1 million in gross margins from our bunkering operations due to lower fuel prices and a decrease of $2.0 million in other product sales.

LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

Our primary cash requirements are for distributions to our partners, debt service, capital expenditures and operating expenses. Our partnership agreement requires that we distribute all “Available Cash” to our common limited partners each quarter. “Available Cash” 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, subject to requirements for distributions for our preferred units. We may maintain our distribution level with other sources of Available Cash, as provided in our partnership agreement, including borrowings under our revolving credit agreement and proceeds from the sale of assets.

In 2022 and 2021, we were able to fund all of our expenses, distribution requirements and capital expenditures using internally generated cash flows. We reduced our leverage to position ourselves to repurchase 6,900,000 of our Series D Preferred Units in November 2022, representing approximately one-third of the outstanding units, using borrowings under our revolving credit agreement.

For the full-year 2023, we expect to fund all of our expenses, distribution requirements and capital expenditures using internally generated cash flows. In the first quarter of 2023, we completed the sale-leaseback of our Corporate Headquarters for approximately $103.0 million, which we used to repay borrowings on our revolving credit agreement. ~~We will continue~~In the second quarter of 2023, we extended the maturity date on our $1.0 billion unsecured revolving credit agreement to ~~evaluate other sources~~January 27, 2027, and extended the scheduled termination date on our $100.0 million receivables financing agreement to July 1, 2026. In the second quarter of ~~liquidity to facilitate the planned redemption~~2023, we also redeemed an aggregate 5,500,000 of ~~the remaining Series D Preferred Units in 2023 and 2024, as discussed below.~~

~~The distribution rate on~~ our Series D Preferred Units, ~~will increase on June 15, 2023. Additionally,~~representing approximately one-third of the then outstanding units, and in July of 2023, we redeemed an aggregate 2,560,000 of our Series D Preferred ~~Units become redeemable, at~~Units. These redemptions were primarily funded with borrowings under our ~~option, beginning on June 29,~~$1.0 billion unsecured revolving credit agreement, which had been partially paid down in the first quarter of 2023 ~~and beginning~~with proceeds from the Sale-Leaseback Transaction.

Beginning in 2028, the holders of the Series D Preferred Units have the option to require us to redeem their units. ~~Therefore, we have taken steps~~We will continue to ~~position ourselves~~evaluate other sources of liquidity to ~~repurchase or redeem~~facilitate the ~~Series D Preferred Units. We repurchased 6,900,000 of our Series D Preferred Units in November 2022, representing approximately one-third~~planned redemption of the ~~outstanding units, and we plan to redeem the~~ remaining ~~16,346,650~~8,286,650 outstanding Series D Preferred Units, ~~in 2023 and 2024, which is several years ahead~~representing approximately 36% of the ~~holders’ redemption option in 2028.~~original issuances.

We have no long-term debt maturities until 2025, and we expect to be able to access debt capital markets to refinance those maturities.

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CASH FLOWS FOR THE ~~THREE~~SIX MONTHS ENDED ~~MARCH 31,~~JUNE 30, 2023 AND 2022

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


		Three Months Ended March 31,					Six Months Ended June 30,
		2023		2022			2023		2022
		(Thousands of Dollars)					(Thousands of Dollars)
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	164,584	$	145,830	Operating activities	$	252,305	$	222,287
Investing activities	Investing activities	88,674		(41,102)		Investing activities	62,082		(14,805)
Financing activities	Financing activities	(262,688)		(99,714)		Financing activities	(325,205)		(209,539)
Effect of foreign exchange rate changes on cash	Effect of foreign exchange rate changes on cash	170		176		Effect of foreign exchange rate changes on cash	310		763
Net (decrease) increase in cash, cash equivalents and restricted cash		$	(9,260)	$	5,190
Net decrease in cash, cash equivalents and restricted cash						Net decrease in cash, cash equivalents and restricted cash	$	(10,508)	$	(1,294)

Net cash provided by operating activities increased ~~$18.8~~$30.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022, mainly due to changes in working capital. Generally, working capital requirements are affected by our accounts receivable, accounts payable and accrued liabilities balances, which vary depending on the timing of payments. Our working capital decreased ~~$32.6~~$1.8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023, ~~and $17.5~~compared to an increase of $30.9 million for the ~~three~~six months ended ~~March 31, 2022.~~June 30, 2022, mainly due to changes in accounts receivable due to timing of payments and receipt of insurance proceeds.

For the ~~three~~six months ended ~~March 31,~~June 30, 2023, we recorded net cash provided by investing activities of ~~$88.7~~$62.1 million, compared to net cash used in investing activities of ~~$41.1~~$14.8 million for the ~~three~~six months ended ~~March 31,~~June 30, 2022, primarily due to proceeds of approximately $103.0 million from the sale of the Corporate Headquarters in the first quarter of ~~2023.~~2023 compared to proceeds from asset sales of $59.5 million in the second quarter of 2022. Additionally, for the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022, capital expenditures decreased ~~$10.7~~$16.9 million and we received ~~higher~~$6.6 million more in insurance ~~proceeds of $6.6 million.~~proceeds.

Net cash used in financing activities increased ~~$163.0~~$115.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2023, compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022, mainly due to anthe partial redemption of Series D Preferred Units for $174.5 million in June 2023. The overall increase inwas partially offset by net debt borrowings of $15.3 million for the six months ended June 30, 2023, compared to net debt repayments ~~which were higher by $165.5~~of $47.7 million ~~as we used asset sale proceeds, cash from operating activities and cash on hand to repay debt in 2023.~~for the six months ended June 30, 2022.

SOURCES OF LIQUIDITY

Revolving Credit Agreement

~~NuStar Logistics’~~On June 30, 2023, we amended our $1.0 billion unsecured revolving credit agreement (the Revolving Credit Agreement), mainly to extend the maturity date from April 27, 2025 to January 27, 2027. The amendment also includes a requirement that we certify that the sum of our Revolving Credit Agreement availability and unrestricted cash balance is no less than $150.0 million on a pro forma basis prior to using any borrowings under the Revolving Credit Agreement to redeem certain unsecured indebtedness or our Series D Preferred Units.

The Revolving Credit Agreement is subject to maximum consolidated debt coverage ratio and minimum consolidated interest coverage ratio requirements, which may limit the amount we can borrow to an amount that is less than the total amount available for borrowing. For a rolling period of four quarters, the consolidated debt coverage ratio (as defined in the Revolving Credit 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 ~~March 31,~~June 30, 2023, our consolidated debt coverage ratio was ~~3.46x~~3.73x and our consolidated interest coverage ratio was ~~2.27x.~~2.20x. As of ~~March 31,~~June 30, 2023, we had ~~$940.4~~$750.4 million available for borrowing. Letters of credit issued under the Revolving Credit Agreement totaled $4.6 million as of ~~March 31,~~June 30, 2023 and limit the amount we can borrow under the Revolving Credit Agreement. Borrowings under the Revolving Credit Agreement bear interest, at our option, at an alternate base rate or a SOFR rate, each as defined in the Revolving Credit Agreement.

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 $100.0 million receivables financing agreement with a third-party lender (the Receivables Financing Agreement) and agreements with certain of NuStar Energy’s wholly owned subsidiaries. On June 29, 2023, we amended the Receivables Financing Agreement to extend the scheduled termination date from January 31, 2025 to July 1, 2026. As of ~~March 31,~~June 30, 2023, ~~$118.0~~$108.2 million of our accounts receivable was included in the Securitization Program and the amount of

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borrowings outstanding under the Receivables Financing Agreement totaled ~~$64.6~~$71.2 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. Borrowings under the Receivables Financing Agreement bear interest, at NuStar Finance’s option, at a base rate or a SOFR rate, each as defined in the Receivables Financing Agreement.

The interest rate on the Revolving Credit Agreement and certain fees under the Receivables Financing Agreement are the only debt arrangements that are subject to adjustment if our debt rating is downgraded (or upgraded) by certain credit rating agencies. Please refer to Note 4 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion of certain of our debt agreements.

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Asset Sales

We used the proceeds from the sale of our Corporate Headquarters on March 21, 2023 ~~to repay outstanding borrowings under our Revolving Credit Agreement. We used the proceeds~~and from the Point Tupper Terminal Disposition on April 29, 2022 to ~~reduce debt and thereby improve~~repay outstanding borrowings under our ~~debt metrics.~~Revolving Credit Agreement. Please refer to Note 2 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion of these dispositions.

MATERIAL CASH REQUIREMENTS

Capital 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 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			Strategic Capital Expenditures		Reliability Capital Expenditures		Total
		(Thousands of Dollars)							(Thousands of Dollars)
For the three months ended March 31:
For the six months ended June 30:								For the six months ended June 30:
2023	2023	$	18,727	$	3,356	$	22,083	2023	$	43,797	$	10,735	$	54,532
2022	2022	$	26,041	$	6,709	$	32,750	2022	$	58,020	$	13,405	$	71,425

Expected for the year ended December 31, 2023	Expected for the year ended December 31, 2023	$130,000 - 150,000		$25,000 - 35,000				Expected for the year ended December 31, 2023	$125,000 - 145,000		$25,000 - 35,000

Strategic capital expenditures for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022 mainly consisted of expansion projects on our Permian Crude System and Central West Refined Products Pipelines, as well as biofuel and other ~~terminal~~ 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 year ended December 31, 2023 to include spending of approximately ~~$45.0~~$35.0 to ~~$60.0~~$45.0 million on expansion projects to accommodate production growth in the Permian Basin and approximately $25.0 million on projects to expand our renewable fuels network on the West Coast. We expect a portion of the remaining strategic capital expenditures to also include connection projects on our ammonia pipeline. We continue to evaluate our capital budget and internal growth projects can be accelerated or scaled back depending on market conditions or customer demand. Therefore, our actual capital expenditures for 2023 may increase or decrease from the expected amounts noted above.

Series D Preferred Units Redemption Features

We have redeemed and repurchased a portion of our Series D Preferred Units, as shown below:


Redemption/Repurchase Date	Units Redeemed/Repurchased	Redemption/ Repurchase Price per Unit, including Accrued Distributions	Redemption/Repurchase Price, including Accrued Distributions
			(Thousands of Dollars)
July 31, 2023	2,560,000	$32.18	$	82,381
June 30, 2023	5,500,000	$31.88	$	175,340
November 22, 2022	6,900,000	$32.73	$	225,837

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We may redeem all or any portion of the remaining 8,286,650 Series D Preferred Units outstanding as of July 31, 2023 in an amount not less than $50.0 million for cash at a redemption price equal to, as applicable: (i) $31.73 per Series D Preferred Unit, or up to $262.9 million, at any time on or after June 29, 2023 but prior to June 29, 2024; (ii) $30.46 per Series D Preferred Unit, or up to $252.4 million, at any time on or after June 29, 2024 but prior to June 29, 2025; (iii) $29.19 per Series D Preferred Unit, or up to $241.9 million, at any time on or after June 29, 2025; plus, in each case, the sum of any unpaid distributions on the applicable Series D Preferred Unit plus the distributions prorated for the number of days elapsed (not to exceed 90) in the period of redemption (Series D Partial Period Distributions).

Additionally, at any time on or after June 29, 2028, each holder of Series D Preferred Units will have the right to require us to redeem all of the Series D Preferred Units held by such holder at a redemption price equal to $29.19 per Series D Preferred Unit, plus any unpaid Series D distributions plus the Series D Partial Period Distributions. If a holder of Series D Preferred Units exercises its redemption right, we may elect to pay up to 50% of such amount in common units (which shall be valued at 93% of a volume-weighted average trading price of the common units); provided, that the common units to be issued do not, in the aggregate, exceed 15% of NuStar Energy’s common equity market capitalization at the time.

Distributions

Preferred Units. Distributions on our 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 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 distribution rates on the outstanding Series D Preferred Units are as follows: (i) 9.75% per annum ($0.619 per unit per distribution period) for the first two years (beginning with the September 17, 2018 distribution); (ii) 10.75% per annum ($0.682 per unit per distribution period) for years three through five; and (iii) the greater of 13.75% per annum ($0.872 per unit per distribution period) or the distribution per common unit thereafter. The number of Series D Preferred Units outstanding as of ~~March 31,~~June 30, 2023 and December 31, 2022 totaled 10,846,650 and 16,346,650, ~~as we repurchased an aggregate 6,900,000 of our Series D Preferred Units in November 2022.~~respectively. While the Series D Preferred Units are outstanding, the Partnership will be prohibited from paying distributions on any junior securities, including the common units, unless full cumulative distributions on the Series D Preferred Units (and any parity securities) have been, or contemporaneously are being, paid or set aside for payment through the most recent Series D Preferred Unit distribution payment date. Any Series D Preferred Unit distributions in excess of $0.635 may be paid, in the Partnership’s sole discretion, in additional Series D Preferred Units, with the remainder paid in cash.

~~Table~~The distribution rate on our Series D Preferred Units increased on June 15, 2023, to the greater of ~~Contents~~

13.75% per annum ($0.872 per unit per distribution period) or the distribution per common unit. Distributions accrued for redeemed units from the notification dates to the redemption dates are reported in “Interest expense, net” on the condensed consolidated statements of comprehensive income and are excluded from total distributions below. Distribution information on our Series D Preferred Units is as follows:


Distribution Period	Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Period	Distribution Rate per Unit		Total Distribution
				(Thousands of Dollars)					(Thousands of Dollars)
June 15, 2023 - September 14, 2023						June 15, 2023 - September 14, 2023	$	0.872	$	7,598	(a)
March 15, 2023 - June 14, 2023	March 15, 2023 - June 14, 2023	$	0.682	$	11,148	March 15, 2023 - June 14, 2023	$	0.682	$	10,315
December 15, 2022 - March 14, 2023	December 15, 2022 - March 14, 2023	$	0.682	$	11,148	December 15, 2022 - March 14, 2023	$	0.682	$	11,148

(a) Estimate is based on outstanding units after the July 31, 2023 redemption.

Information on our 8.50% Series A, 7.625% Series B and 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (collectively, the Series A, B and C Preferred Units) is shown below:

Units

Units Issued and Outstanding as of ~~March 31,~~June 30, 2023

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 plus 6.766%

Series B Preferred Units

15,400,000

June 15, 2022

Three-month LIBOR plus 5.643%

Series C Preferred Units

6,900,000

December 15, 2022

Three-month LIBOR plus 6.88%

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Distribution information on our Series A, B and C Preferred Units is as follows:


		Series A Preferred Units				Series B Preferred Units				Series C Preferred Units					Series A Preferred Units				Series B Preferred Units				Series C Preferred Units
Distribution Period	Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Period	Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution		Distribution Rate per Unit		Total Distribution
				(Thousands of Dollars)				(Thousands of Dollars)				(Thousands of Dollars)					(Thousands of Dollars)				(Thousands of Dollars)				(Thousands of Dollars)

June 15, 2023 - September 14, 2023 (a)														June 15, 2023 - September 14, 2023 (a)	$	0.76715	$	6,950	$	0.69696	$	10,733	$	0.77428	$	5,343
March 15, 2023 - June 14, 2023	March 15, 2023 - June 14, 2023	$	0.73169	$	6,629	$	0.66150	$	10,187	$	0.73881	$	5,098	March 15, 2023 - June 14, 2023	$	0.73169	$	6,629	$	0.66150	$	10,187	$	0.73881	$	5,098
December 15, 2022 - March 14, 2023	December 15, 2022 - March 14, 2023	$	0.71889	$	6,513	$	0.64871	$	9,990	$	0.72602	$	5,010	December 15, 2022 - March 14, 2023	$	0.71889	$	6,513	$	0.64871	$	9,990	$	0.72602	$	5,010

(a) Total distributions are estimated based on the number of units outstanding as of June 30, 2023.

In ~~April~~July 2023, our board of directors declared distributions with respect to the Series A, B and C Preferred Units and the Series D Preferred Units to be paid on ~~June~~September 15, 2023.

Common Units. Distribution payments are made to our common limited partners within 45 days after the end of each quarter as of a record date that is set after the end of each quarter. In ~~April~~July 2023, our board of directors declared distributions with respect to our common units for the quarter ended ~~March 31,~~June 30, 2023. The following table summarizes information about quarterly cash distributions to our common limited partners applicable to the period in which the distributions were earned:

Quarter Ended

Cash Distributions
Per Unit

Total Cash
Distributions

Record Date

Payment Date

Quarter Ended

Cash Distributions
Per Unit

Total Cash
Distributions

Record Date

Payment Date

(Thousands of Dollars)

June 30, 2023

0.40

44,363

August 8, 2023

August 14, 2023

March 31, 2023

0.40

44,396

May 8, 2023

May 12, 2023

March 31, 2023

0.40

44,396

May 8, 2023

May 12, 2023

December 31, 2022

0.40

44,328

February 8, 2023

February 14, 2023

December 31, 2022

0.40

44,328

February 8, 2023

February 14, 2023

Debt Obligations

The following table summarizes our debt obligations:


		Maturity			Outstanding Obligations as of March 31, 2023			Maturity			Outstanding Obligations as of June 30, 2023
					(Thousands of Dollars)						(Thousands of Dollars)
Receivables Financing Agreement, 6.4% as of March 31, 2023		January 31, 2025			$	64,600
Revolving Credit Agreement, 7.6% as of March 31, 2023		April 27, 2025			$	55,000
5.75% senior notes	5.75% senior notes	October 1, 2025			$	600,000	5.75% senior notes	October 1, 2025			$	600,000
6.00% senior notes	6.00% senior notes	June 1, 2026			$	500,000	6.00% senior notes	June 1, 2026			$	500,000
Receivables Financing Agreement, 6.7% as of June 30, 2023							Receivables Financing Agreement, 6.7% as of June 30, 2023	July 1, 2026			$	71,200
Revolving Credit Agreement, 7.7% as of June 30, 2023							Revolving Credit Agreement, 7.7% as of June 30, 2023	January 27, 2027			$	245,000
5.625% senior notes	5.625% senior notes	April 28, 2027			$	550,000	5.625% senior notes	April 28, 2027			$	550,000
6.375% senior notes	6.375% senior notes	October 1, 2030			$	600,000	6.375% senior notes	October 1, 2030			$	600,000
GoZone Bonds 5.85% - 6.35%	GoZone Bonds 5.85% - 6.35%	2038	thru	2041	$	322,140	GoZone Bonds 5.85% - 6.35%	2038	thru	2041	$	322,140
Subordinated Notes, 11.5% as of March 31, 2023		January 15, 2043			$	402,500
Subordinated Notes, 12.0% as of June 30, 2023							Subordinated Notes, 12.0% as of June 30, 2023	January 15, 2043			$	402,500

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We believe that, as of ~~March 31,~~June 30, 2023, we are in compliance with the ratios and covenants applicable to our debt obligations. A default under certain of our debt obligations would be considered an event of default under other of our debt obligations. 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 obligations.

Guarantor Summarized Financial Information. NuStar Energy has no operations, and its assets consist mainly of its 100% ownership interest in its 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. Each guarantee of the senior notes by NuStar Energy and NuPOP ranks equally in right of payment with all other existing and future unsecured senior indebtedness of that guarantor, 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 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 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, under any bank credit facility or public debt instrument. The rights of holders of our senior and subordinated notes may be limited under

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the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. 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 obligations.

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.


Summarized Combined Balance Sheet Information:						Summarized Combined Balance Sheet Information:
							June 30, 2023		December 31, 2022
		March 31, 2023		December 31, 2022			(Thousands of Dollars)
		(Thousands of Dollars)
Summarized Combined Balance Sheet Information:
Current assets	Current assets	$	35,523	$	44,328	Current assets	$	36,319	$	44,328
Long-term assets	Long-term assets	$	3,199,255	$	3,210,483	Long-term assets	$	3,178,600	$	3,210,483
Current liabilities (a)	Current liabilities (a)	$	159,609	$	120,633	Current liabilities (a)	$	128,114	$	120,633
Long-term liabilities, including long-term debt	Long-term liabilities, including long-term debt	$	3,196,472	$	3,279,200	Long-term liabilities, including long-term debt	$	3,390,522	$	3,279,200
Mandatorily redeemable Series D preferred units						Mandatorily redeemable Series D preferred units	$	81,229	$	—
Series D preferred limited partners interests	Series D preferred limited partners interests	$	450,641	$	446,970	Series D preferred limited partners interests	$	230,264	$	446,970
(a)Excludes $1,721.1 million and $1,694.4 million of net intercompany payables as of March 31, 2023 and December 31, 2022, respectively, due to the non-guarantor subsidiaries from the Guarantor Issuer Group.
(a)Excludes $1,784.1 million and $1,694.4 million of net intercompany payables as of June 30, 2023 and December 31, 2022, respectively, due to the non-guarantor subsidiaries from the Guarantor Issuer Group.						(a)Excludes $1,784.1 million and $1,694.4 million of net intercompany payables as of June 30, 2023 and December 31, 2022, respectively, due to the non-guarantor subsidiaries from the Guarantor Issuer Group.

Long-term assets for the non-guarantor subsidiaries totaled ~~$1,550.4~~$1,544.9 million and $1,559.3 million as of ~~March 31,~~June 30, 2023 and December 31, 2022, respectively.


				~~Three Months Ended March 31, 2023~~
				~~(Thousands of Dollars)~~
Summarized Combined Income Statement Information:
	Six Months Ended June 30, 2023
	(Thousands of Dollars)
Revenues		$	~~203,609~~401,386
Operating income		$	~~113,361~~173,518
Interest expense, net		$	~~(56,695)~~(114,320)
Net income		$	~~57,426~~59,539

Revenues and net income for the non-guarantor subsidiaries totaled ~~$190.3~~$370.8 million and ~~$48.5~~$92.5 million, respectively, for the ~~three~~six months ended ~~March 31,~~June 30, 2023.

~~Table of Contents~~

Contractual Obligations

On March 21, 2023, we entered into an operating lease agreement for our Corporate Headquarters with an initial term of twenty years, with two renewal options of ten years each. During the initial term, rent under the lease starts at $6.4 million per year and increases annually by 2.5%. Please refer to Note 2 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for further discussion.

~~Series D Preferred Units Conversion and Redemption Features~~

~~Each holder of Series D Preferred Units may convert all or any portion of its Series D Preferred Units into common units on a one-for-one basis, subject to certain restrictions and adjustments.~~

In November 2022, we repurchased an aggregate 6,900,000 of our Series D Preferred Units at a price per unit of $32.73 for an aggregate purchase price of $225.8 million, including approximately $3.4 million related to accrued distributions. We may redeem all or any portion of the 16,346,650 Series D Preferred Units outstanding in an amount not less than $50.0 million for cash at a redemption price equal to, as applicable: (i) $31.73 per Series D Preferred Unit, or up to $518.7 million, at any time on or after June 29, 2023 but prior to June 29, 2024; (ii) $30.46 per Series D Preferred Unit, or up to $497.9 million, at any time on or after June 29, 2024 but prior to June 29, 2025; (iii) $29.19 per Series D Preferred Unit, or up to $477.2 million, at any time on or after June 29, 2025; plus, in each case, the sum of any unpaid distributions on the applicable Series D Preferred Unit plus the distributions prorated for the number of days elapsed (not to exceed 90) in the period of redemption (Series D Partial Period Distributions).

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, including those relating to the discharge of materials into the environment, waste management, remediation, the characteristics and composition of fuels, climate change and greenhouse gases. Our operations are also subject to extensive health, safety and security laws and regulations, including those relating to worker and pipeline safety, pipeline and storage tank integrity and 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.

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CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management 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 are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

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Item 3. Quantitative and Qualitative Disclosures About Market 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. Borrowings under our variable-rate debt expose us to increases in interest rates.

On June 30, 2023, we amended our Revolving Credit Agreement, mainly to extend the maturity date from April 27, 2025 to January 27, 2027. On June 29, 2023, we amended our Receivables Financing Agreement to extend the scheduled termination date from January 31, 2025 to July 1, 2026. Please refer to Note 4 of the Condensed Notes to the Consolidated Financial Statements in Item 1. "Financial Statements" for more information.

The following tables present principal cash flows and related weighted-average interest rates by expected maturity dates for our long-term debt, excluding finance leases:


		March 31, 2023																						June 30, 2023
		Expected Maturity Dates																						Expected Maturity Dates
		2023		2024		2025			2026			2027			Thereafter			Total			Fair Value			2023		2024		2025			2026			2027			Thereafter			Total			Fair Value
		(Thousands of Dollars, Except Interest Rates)																						(Thousands of Dollars, Except Interest Rates)
Fixed-rate debt	Fixed-rate debt	$	—	$	—	$	600,000		$	500,000		$	550,000		$	922,140		$	2,572,140		$	2,518,556	Fixed-rate debt	$	—	$	—	$	600,000		$	500,000		$	550,000		$	922,140		$	2,572,140		$	2,526,199
Weighted-average rate	Weighted-average rate	—		—		5.8		%	6.0		%	5.6		%	6.3		%	6.0		%	—		Weighted-average rate	—		—		5.8		%	6.0		%	5.6		%	6.3		%	6.0		%	—
Variable-rate debt	Variable-rate debt	$	—	$	—	$	119,600		$	—		$	—		$	402,500		$	522,100		$	527,127	Variable-rate debt	$	—	$	—	$	—		$	71,200		$	245,000		$	402,500		$	718,700		$	724,500
Weighted-average rate	Weighted-average rate	—		—		7.0		%	—			—			11.5		%	10.5		%	—		Weighted-average rate	—		—		—			6.7		%	7.7		%	12.0		%	10.0		%	—


	December 31, 2022
	Expected Maturity Dates
	2023		2024		2025			2026			2027			Thereafter			Total			Fair Value
	(Thousands of Dollars, Except Interest Rates)
Fixed-rate debt	$	—	$	—	$	600,000		$	500,000		$	550,000		$	922,140		$	2,572,140		$	2,478,720
Weighted-average rate	—		—		5.8		%	6.0		%	5.6		%	6.3		%	6.0		%	—
Variable-rate debt	$	—	$	—	$	300,900		$	—		$	—		$	402,500		$	703,400		$	690,944
Weighted-average rate	—		—		6.7		%	—			—			10.8		%	9.0		%	—

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 Series A, B and C Preferred Units expose us to changes in interest rates as the distribution rates on these units converted to a floating rate ~~of the applicable LIBOR plus a spread~~ on December 15, 2021, June 15, 2022 and December 15, 2022, respectively. 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 at ~~March 31,~~June 30, 2023 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. Please see Note 7 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for additional information on our Series A, B and C Preferred Units.

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. Derivative financial instruments associated with commodity price risk were not material for any periods presented.

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Item 4. 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 ~~March 31,~~June 30, 2023.

(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.

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PART II - OTHER INFORMATION

Item 5. Other Information

Rule 10b5-1 under the Exchange Act 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 June 30, 2023, none of our executive officers or directors adopted or terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

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Item 6.Exhibits


Exhibit Number		Description


10.01		~~Lease~~First Amendment to Second Amended and Restated 5-Year Revolving Credit Agreement, ~~between~~dated as of June 30, 2023, among NuStar Logistics, L.P. ~~as Tenant~~, NuStar Energy L.P., NuStar Pipeline Operating Partnership L.P., Wells Fargo Bank, National Association, and ~~NS San Antonio TX Landlord, LLC as Landlord, dated March 21, 2023~~ ~~(inco~~r ~~porated~~the lenders party thereto (incorporated by ~~reference~~reference to E ~~xhibit 10.1~~Exhibit 10.01 to NuStar Energy L.P.’s Current Report on Form 8-K filed June 30,’s2023 (File No. 001-16417 ))

10.02		Seventh Amendment to the Receivables Financing Agreement, dated as of June 29, 2023, among NuStar Finance LLC, NuStar Energy L.P. and PNC Bank, National Association (incorporated by reference to Exhibit 10.02 to NuStar Energy L.P.’s Current Report on Form 8-K filed June 30,2023 (File No. 001-16417))

10.03		Amended and Restated NuStar Energy L.P. 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.0 1 to NuStar Energy L.P.’s Current Report on Form 8-K filed ~~March 2~~4April 28 , ~~2023~~ 2023 (File No .No. 001-16417))

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, ~~202~~2 2022 (File No. 001-16417))

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

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SIGNATURES

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

NUSTAR ENERGY L.P.

(Registrant)

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

By: NuStar GP, LLC, its general partner


By:						/s/ Bradley C. Barron
						Bradley C. Barron
						Chairman of the Board, President and Chief Executive Officer
						~~May 5,~~August 4, 2023

By:						/s/ Thomas R. Shoaf
						Thomas R. Shoaf
						Executive Vice President and Chief Financial Officer
						~~May 5,~~August 4, 2023

By:						/s/ Jorge A. del Alamo
						Jorge A. del Alamo
						Senior Vice President and Controller
						~~May 5,~~August 4, 2023

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	Price per Unit		Number of Units
June 29, 2018 issuance	$	25.38	15,760,441
July 13, 2018 issuance	$	25.38	7,486,209
Total units issued			23,246,650
November 22, 2022 repurchase	$	32.73	(6,900,000)
Units outstanding at March 31, 2023 and December 31, 2022			16,346,650