CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS NuStar Energy has no operations and its assets consist mainly of its 100% indirectly owned subsidiaries, NuStar Logistics and NuPOP. The senior and subordinated notes issued by NuStar Logistics are fully and unconditionally guaranteed by NuStar Energy and NuPOP. As a result, the following condensed consolidating financial statements are presented as an alternative to providing separate financial statements for NuStar Logistics and NuPOP. Condensed Consolidating Balance Sheets March 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Assets Cash and cash equivalents $ 746 $ 6 $ — $ 26,453 $ — $ 27,205 Receivables, net — 45 — 166,877 — 166,922 Inventories — 1,958 4,307 30,842 — 37,107 Other current assets 175 8,813 4,776 8,668 — 22,432 Intercompany receivable — 1,342,164 — 55,969 (1,398,133 ) — Total current assets 921 1,352,986 9,083 288,809 (1,398,133 ) 253,666 Property, plant and equipment, net — 1,919,752 582,944 1,220,572 — 3,723,268 Intangible assets, net — 65,598 — 54,262 — 119,860 Goodwill — 149,453 170,652 376,532 — 696,637 Investment in wholly owned subsidiaries 1,918,278 35,888 1,247,932 869,545 (4,071,643 ) — Deferred income tax asset — — — 1,743 — 1,743 Other long-term assets, net 1,165 62,050 28,318 8,709 — 100,242 Total assets $ 1,920,364 $ 3,585,727 $ 2,038,929 $ 2,820,172 $ (5,469,776 ) $ 4,895,416 Liabilities and Partners’ Equity Payables $ 926 $ 16,615 $ 1,965 $ 78,971 $ — $ 98,477 Short-term debt — 72,000 — — — 72,000 Accrued interest payable — 27,692 — 23 — 27,715 Accrued liabilities 777 6,722 12,370 19,644 — 39,513 Taxes other than income tax — 4,259 4,555 4,095 — 12,909 Income tax payable — 1,656 7 2,215 — 3,878 Intercompany payable 257,904 — 1,140,229 — (1,398,133 ) — Total current liabilities 259,607 128,944 1,159,126 104,948 (1,398,133 ) 254,492 Long-term debt — 2,891,290 — 60,690 — 2,951,980 Deferred income tax liability — 1,861 13 20,571 — 22,445 Other long-term liabilities — 35,139 10,261 50,756 — 96,156 Total partners’ equity 1,660,757 528,493 869,529 2,583,207 (4,071,643 ) 1,570,343 Total liabilities and partners’ equity $ 1,920,364 $ 3,585,727 $ 2,038,929 $ 2,820,172 $ (5,469,776 ) $ 4,895,416 Condensed Consolidating Balance Sheets December 31, 2016 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Assets Cash and cash equivalents $ 870 $ 5 $ — $ 35,067 $ — $ 35,942 Receivables, net — 3,040 — 167,570 — 170,610 Inventories — 2,216 2,005 33,724 — 37,945 Other current assets 61 120,350 1,829 10,446 — 132,686 Intercompany receivable — 1,308,415 — 57,785 (1,366,200 ) — Total current assets 931 1,434,026 3,834 304,592 (1,366,200 ) 377,183 Property, plant and equipment, net — 1,935,172 589,139 1,197,972 — 3,722,283 Intangible assets, net — 71,033 — 56,050 — 127,083 Goodwill — 149,453 170,652 376,532 — 696,637 Investment in wholly owned subsidiaries 1,964,736 34,778 1,221,717 874,649 (4,095,880 ) — Deferred income tax asset — — — 2,051 — 2,051 Other long-term assets, net 1,255 63,586 28,587 11,880 — 105,308 Total assets $ 1,966,922 $ 3,688,048 $ 2,013,929 $ 2,823,726 $ (5,462,080 ) $ 5,030,545 Liabilities and Partners’ Equity Payables $ 2,436 $ 24,272 $ 7,124 $ 84,854 $ — $ 118,686 Short-term debt — 54,000 — — — 54,000 Accrued interest payable — 34,008 — 22 — 34,030 Accrued liabilities 1,070 7,118 10,766 41,531 — 60,485 Taxes other than income tax 125 6,854 3,253 5,453 — 15,685 Income tax payable — 1,326 5 5,179 — 6,510 Intercompany payable 257,497 — 1,108,703 — (1,366,200 ) — Total current liabilities 261,128 127,578 1,129,851 137,039 (1,366,200 ) 289,396 Long-term debt — 2,956,338 — 58,026 — 3,014,364 Deferred income tax liability — 1,862 13 20,329 — 22,204 Other long-term liabilities — 34,358 9,436 49,170 — 92,964 Total partners’ equity 1,705,794 567,912 874,629 2,559,162 (4,095,880 ) 1,611,617 Total liabilities and partners’ equity $ 1,966,922 $ 3,688,048 $ 2,013,929 $ 2,823,726 $ (5,462,080 ) $ 5,030,545 Condensed Consolidating Statements of Comprehensive Income For the Three Months Ended March 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 123,629 $ 52,241 $ 311,847 $ (287 ) $ 487,430 Costs and expenses 509 76,322 29,806 283,941 (287 ) 390,291 Operating (loss) income (509 ) 47,307 22,435 27,906 — 97,139 Equity in earnings of subsidiaries 58,445 1,110 26,215 47,353 (133,123 ) — Interest income (expense), net 4 (36,914 ) (1,304 ) 1,800 — (36,414 ) Other income, net — 21 6 113 — 140 Income before income tax expense 57,940 11,524 47,352 77,172 (133,123 ) 60,865 Income tax expense — 331 1 2,593 — 2,925 Net income $ 57,940 $ 11,193 $ 47,351 $ 74,579 $ (133,123 ) $ 57,940 Comprehensive income $ 57,940 $ 13,031 $ 47,351 $ 76,504 $ (133,123 ) $ 61,703 Condensed Consolidating Statements of Comprehensive Income For the Three Months Ended March 31, 2016 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 126,578 $ 47,985 $ 231,476 $ (336 ) $ 405,703 Costs and expenses 518 68,891 31,015 211,050 (336 ) 311,138 Operating (loss) income (518 ) 57,687 16,970 20,426 — 94,565 Equity in earnings (loss) of subsidiaries 57,922 (3,115 ) 25,283 43,743 (123,833 ) — Interest (expense) income, net — (39,632 ) 1,508 8,352 (4,351 ) (34,123 ) Other income (expense), net — 1 (17 ) (155 ) — (171 ) Income before income tax expense 57,404 14,941 43,744 72,366 (128,184 ) 60,271 Income tax expense 3 346 2 2,519 — 2,870 Net income $ 57,401 $ 14,595 $ 43,742 $ 69,847 $ (128,184 ) $ 57,401 Comprehensive income (loss) $ 57,401 $ (13,161 ) $ 43,742 $ 82,825 $ (128,184 ) $ 42,623 Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 103,517 $ 35,964 $ 23,855 $ 78,004 $ (157,360 ) $ 83,980 Cash flows from investing activities: Capital expenditures — (7,671 ) (1,761 ) (36,300 ) — (45,732 ) Change in accounts payable related to capital expenditures — (4,908 ) (1,103 ) (809 ) — (6,820 ) Proceeds from sale or disposition of assets — 1,833 6 20 — 1,859 Proceeds from Axeon term loan — 110,000 — — — 110,000 Net cash provided by (used in) investing activities — 99,254 (2,858 ) (37,089 ) — 59,307 Cash flows from financing activities: Debt borrowings — 404,166 — 6,100 — 410,266 Debt repayments — (451,694 ) — (3,500 ) — (455,194 ) Distributions to preferred unitholders (5,883 ) (2,941 ) (2,941 ) (2,942 ) 8,824 (5,883 ) Distributions to common unitholders and general partner (99,021 ) (49,511 ) (49,511 ) (49,514 ) 148,536 (99,021 ) Net intercompany activity 3,196 (34,952 ) 31,455 301 — — Decrease in cash book overdrafts — (283 ) — — — (283 ) Other, net (1,933 ) (2 ) — — — (1,935 ) Net cash used in financing activities (103,641 ) (135,217 ) (20,997 ) (49,555 ) 157,360 (152,050 ) Effect of foreign exchange rate changes on cash — — — 26 — 26 Net (decrease) increase in cash and cash equivalents (124 ) 1 — (8,614 ) — (8,737 ) Cash and cash equivalents as of the beginning of the period 870 5 — 35,067 — 35,942 Cash and cash equivalents as of the end of the period $ 746 $ 6 $ — $ 26,453 $ — $ 27,205 Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2016 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 97,539 $ 7,958 $ 18,028 $ 129,635 $ (151,433 ) $ 101,727 Cash flows from investing activities: Capital expenditures — (28,899 ) (5,442 ) (11,835 ) — (46,176 ) Change in accounts payable related to capital expenditures — (7,637 ) (74 ) (4,952 ) — (12,663 ) Net cash used in investing activities — (36,536 ) (5,516 ) (16,787 ) — (58,839 ) Cash flows from financing activities: Debt borrowings — 296,089 — 6,000 — 302,089 Debt repayments — (219,709 ) — (11,000 ) — (230,709 ) Distributions to common unitholders and general partner (98,051 ) (49,026 ) (49,025 ) (49,031 ) 147,082 (98,051 ) Net intercompany activity 507 2,998 36,513 (44,369 ) 4,351 — Other, net (1 ) (1,774 ) — (7,029 ) — (8,804 ) Net cash (used in) provided by financing activities (97,545 ) 28,578 (12,512 ) (105,429 ) 151,433 (35,475 ) Effect of foreign exchange rate changes on cash — — — 4,642 — 4,642 Net (decrease) increase in cash and cash equivalents (6 ) — — 12,061 — 12,055 Cash and cash equivalents as of the beginning of the period 885 4 — 117,973 — 118,862 Cash and cash equivalents as of the end of the period $ 879 $ 4 $ — $ 130,034 $ — $ 130,917 |