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 December 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Assets Cash and cash equivalents $ 885 $ 29 $ — $ 23,378 $ — $ 24,292 Receivables, net — 280 — 176,495 — 176,775 Inventories — 1,686 8,611 16,560 — 26,857 Other current assets 61 11,412 4,191 6,844 — 22,508 Intercompany receivable — 3,112,164 — — (3,112,164 ) — Total current assets 946 3,125,571 12,802 223,277 (3,112,164 ) 250,432 Property, plant and equipment, net — 1,893,720 591,070 1,816,143 — 4,300,933 Intangible assets, net — 58,530 — 725,949 — 784,479 Goodwill — 149,453 170,652 777,370 — 1,097,475 Investment in wholly owned subsidiaries 2,891,371 24,162 1,301,717 790,882 (5,008,132 ) — Deferred income tax asset — — — 233 — 233 Other long-term assets, net 303 65,684 27,493 8,201 — 101,681 Total assets $ 2,892,620 $ 5,317,120 $ 2,103,734 $ 4,342,055 $ (8,120,296 ) $ 6,535,233 Liabilities and Partners’ Equity Current portion of long-term debt $ — $ 349,990 $ — $ — $ — $ 349,990 Payables 4,078 27,642 13,160 101,052 — 145,932 Short-term debt — 35,000 — — — 35,000 Accrued interest payable — 40,402 — 47 — 40,449 Accrued liabilities 1,105 17,628 9,450 33,395 — 61,578 Taxes other than income tax 125 7,110 3,794 3,356 — 14,385 Income tax payable — 732 4 3,436 — 4,172 Intercompany payable 322,296 — 1,277,691 1,512,177 (3,112,164 ) — Total current liabilities 327,604 478,504 1,304,099 1,653,463 (3,112,164 ) 651,506 Long-term debt, less current portion — 3,201,220 — 61,849 — 3,263,069 Deferred income tax liability — 1,262 12 20,998 — 22,272 Other long-term liabilities — 58,806 8,861 50,630 — 118,297 Total partners’ equity 2,565,016 1,577,328 790,762 2,555,115 (5,008,132 ) 2,480,089 Total liabilities and partners’ equity $ 2,892,620 $ 5,317,120 $ 2,103,734 $ 4,342,055 $ (8,120,296 ) $ 6,535,233 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 Income (Loss) For the Year Ended December 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 496,454 $ 221,125 $ 1,097,458 $ (1,018 ) $ 1,814,019 Costs and expenses 1,868 317,871 146,243 1,012,777 (1,018 ) 1,477,741 Operating (loss) income (1,868 ) 178,583 74,882 84,681 — 336,278 Equity in earnings (loss) of subsidiaries 149,775 (10,616 ) 89,405 158,700 (387,264 ) — Interest income (expense), net 57 (176,897 ) (5,587 ) 9,344 — (173,083 ) Other income (expense), net — 145 3 (5,442 ) — (5,294 ) Income (loss) before income tax (benefit) expense 147,964 (8,785 ) 158,703 247,283 (387,264 ) 157,901 Income tax (benefit) expense — (820 ) 2 10,755 — 9,937 Net income (loss) $ 147,964 $ (7,965 ) $ 158,701 $ 236,528 $ (387,264 ) $ 147,964 Condensed Consolidating Statements of Income (Loss) For the Year Ended December 31, 2016 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 511,650 $ 224,966 $ 1,021,804 $ (1,738 ) $ 1,756,682 Costs and expenses 1,806 302,099 150,384 945,022 (1,738 ) 1,397,573 Operating (loss) income (1,806 ) 209,551 74,582 76,782 — 359,109 Equity in earnings (loss) of subsidiaries 151,794 (13,769 ) 82,202 156,036 (376,263 ) — Interest (expense) income, net — (139,827 ) (744 ) 2,221 — (138,350 ) Other income (expense), net 18 (58,264 ) (26 ) (511 ) — (58,783 ) Income (loss) before income tax expense (benefit) 150,006 (2,309 ) 156,014 234,528 (376,263 ) 161,976 Income tax expense (benefit) 3 1,607 (23 ) 10,386 — 11,973 Net income (loss) $ 150,003 $ (3,916 ) $ 156,037 $ 224,142 $ (376,263 ) $ 150,003 Condensed Consolidating Statements of Income For the Year Ended December 31, 2015 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 547,959 $ 215,469 $ 1,322,675 $ (2,063 ) $ 2,084,040 Costs and expenses 1,717 293,708 140,081 1,259,935 (2,105 ) 1,693,336 Operating (loss) income (1,717 ) 254,251 75,388 62,740 42 390,704 Equity in earnings (loss) of subsidiaries 308,437 (7,257 ) 120,768 197,760 (619,708 ) — Interest (expense) income, net — (137,847 ) 1,611 4,368 — (131,868 ) Other income, net — 1,179 5 60,638 — 61,822 Income from continuing operations before income tax (benefit) expense 306,720 110,326 197,772 325,506 (619,666 ) 320,658 Income tax (benefit) expense — (392 ) 23 15,081 — 14,712 Income from continuing operations 306,720 110,718 197,749 310,425 (619,666 ) 305,946 Income from discontinued operations, net of tax — — — 774 — 774 Net income $ 306,720 $ 110,718 $ 197,749 $ 311,199 $ (619,666 ) $ 306,720 Condensed Consolidating Statements of Comprehensive Income (Loss) For the Year Ended December 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 147,964 $ (7,965 ) $ 158,701 $ 236,528 $ (387,264 ) $ 147,964 Other comprehensive income (loss): Foreign currency translation adjustment — — — 17,466 — 17,466 Net loss on pension and other postretirement benefit adjustments, net of tax benefit — — — (6,170 ) — (6,170 ) Net loss on cash flow hedges — (2,046 ) — — — (2,046 ) Total other comprehensive (loss) income — (2,046 ) — 11,296 — 9,250 Comprehensive income (loss) $ 147,964 $ (10,011 ) $ 158,701 $ 247,824 $ (387,264 ) $ 157,214 Condensed Consolidating Statements of Comprehensive Income For the Year Ended December 31, 2016 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 150,003 $ (3,916 ) $ 156,037 $ 224,142 $ (376,263 ) $ 150,003 Other comprehensive income (loss): Foreign currency translation adjustment — — — (8,243 ) — (8,243 ) Net loss on pension and other postretirement benefit adjustments, net of tax benefits — — — (2,850 ) — (2,850 ) Net gain on cash flow hedges — 5,710 — — — 5,710 Total other comprehensive income (loss) — 5,710 — (11,093 ) — (5,383 ) Comprehensive income $ 150,003 $ 1,794 $ 156,037 $ 213,049 $ (376,263 ) $ 144,620 Condensed Consolidating Statements of Comprehensive Income For the Year Ended December 31, 2015 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net income $ 306,720 $ 110,718 $ 197,749 $ 311,199 $ (619,666 ) $ 306,720 Other comprehensive income (loss): Foreign currency translation adjustment — — — (31,987 ) — (31,987 ) Net gain on cash flow hedges — 11,105 — — — 11,105 Total other comprehensive income (loss) — 11,105 — (31,987 ) — (20,882 ) Comprehensive income $ 306,720 $ 121,823 $ 197,749 $ 279,212 $ (619,666 ) $ 285,838 Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 483,481 $ 152,101 $ 102,405 $ 405,950 $ (737,138 ) $ 406,799 Cash flows from investing activities: Capital expenditures — (47,600 ) (35,041 ) (301,997 ) — (384,638 ) Change in accounts payable related to capital expenditures — (1,988 ) 5,964 32,927 — 36,903 Acquisitions — — — (1,461,719 ) — (1,461,719 ) Proceeds from Axeon term loan — 110,000 — — — 110,000 Proceeds from insurance recoveries — — — 977 — 977 Proceeds from sale or disposition of assets — 1,955 18 63 — 2,036 Investment in subsidiaries (1,262,000 ) — — (126 ) 1,262,126 — Net cash (used in) provided by investing activities (1,262,000 ) 62,367 (29,059 ) (1,729,875 ) 1,262,126 (1,696,441 ) Cash flows from financing activities: Debt borrowings — 2,969,400 — 90,700 — 3,060,100 Debt repayments — (2,400,739 ) — (86,800 ) — (2,487,539 ) Issuance of preferred units, net of issuance costs 538,560 — — — — 538,560 Issuance of common units, net of issuance costs 643,878 — — — — 643,878 General partner contribution 13,737 — — — — 13,737 Distributions to preferred unitholders (38,833 ) (19,417 ) (19,416 ) (19,418 ) 58,251 (38,833 ) Distributions to common unitholders and general partner (446,306 ) (223,153 ) (223,153 ) (223,176 ) 669,482 (446,306 ) Contributions from (distributions to) affiliates — 1,262,000 — (9,279 ) (1,252,721 ) — Net intercompany activity 73,206 (1,801,218 ) 169,223 1,558,789 — — Other, net (5,708 ) (1,317 ) — (300 ) — (7,325 ) Net cash provided by (used in) financing activities 778,534 (214,444 ) (73,346 ) 1,310,516 (524,988 ) 1,276,272 Effect of foreign exchange rate changes on cash — — — 1,720 — 1,720 Net increase (decrease) in cash and cash equivalents 15 24 — (11,689 ) — (11,650 ) 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 $ 885 $ 29 $ — $ 23,378 $ — $ 24,292 Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2016 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 391,773 $ 167,900 $ 211,816 $ 359,283 $ (694,011 ) $ 436,761 Cash flows from investing activities: Capital expenditures — (64,334 ) (52,637 ) (87,387 ) — (204,358 ) Change in accounts payable related to capital expenditures — (10,076 ) (285 ) (702 ) — (11,063 ) Acquisitions — (95,657 ) — — — (95,657 ) Investment in subsidiaries — — (212,900 ) — 212,900 — Net cash used in investing activities — (170,067 ) (265,822 ) (88,089 ) 212,900 (311,078 ) Cash flows from financing activities: Debt borrowings — 1,365,529 — 41,200 — 1,406,729 Debt repayments — (1,419,852 ) — (36,300 ) — (1,456,152 ) Issuance of preferred units, net of 218,400 — — — — 218,400 Issuance of common units, net of 27,710 — — — — 27,710 General partner contribution 680 — — — — 680 Distributions to common unitholders and general partner (392,962 ) (196,481 ) (196,481 ) (196,501 ) 589,463 (392,962 ) Contributions from affiliates — — — 108,352 (108,352 ) — Net intercompany activity (241,131 ) 255,326 250,487 (264,682 ) — — Other, net (4,485 ) (2,354 ) — (8,890 ) — (15,729 ) Net cash (used in) provided by financing activities (391,788 ) 2,168 54,006 (356,821 ) 481,111 (211,324 ) Effect of foreign exchange rate changes on cash — — — 2,721 — 2,721 Net (decrease) increase in cash and cash equivalents (15 ) 1 — (82,906 ) — (82,920 ) 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 $ 870 $ 5 $ — $ 35,067 $ — $ 35,942 Condensed Consolidating Statements of Cash Flows For the Year Ended December 31, 2015 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 389,967 $ 237,780 $ 119,928 $ 365,588 $ (588,326 ) $ 524,937 Cash flows from investing activities: Capital expenditures — (201,388 ) (39,533 ) (83,887 ) — (324,808 ) Change in accounts payable related to capital expenditures — (4,950 ) 33 1,761 — (3,156 ) Acquisitions — — — (142,500 ) — (142,500 ) Proceeds from insurance recoveries — — — 4,867 — 4,867 Proceeds from sale or disposition of assets — 10,320 22 6,790 — 17,132 Investment in other long-term assets — — — (3,564 ) — (3,564 ) Net cash used in investing activities — (196,018 ) (39,478 ) (216,533 ) — (452,029 ) Cash flows from financing activities: Debt borrowings — 1,589,131 — 94,500 — 1,683,631 Debt repayments — (1,275,910 ) — (41,000 ) — (1,316,910 ) Distributions to common unitholders and general partner (392,204 ) (196,102 ) (196,102 ) (196,122 ) 588,326 (392,204 ) Net intercompany activity 2,199 (155,278 ) 115,652 37,427 — — Other, net — (3,605 ) — (141 ) — (3,746 ) Net cash used in financing activities (390,005 ) (41,764 ) (80,450 ) (105,336 ) 588,326 (29,229 ) Effect of foreign exchange rate changes on cash — — — (12,729 ) — (12,729 ) Net (decrease) increase in cash and cash equivalents (38 ) (2 ) — 30,990 — 30,950 Cash and cash equivalents as of the beginning of the period 923 6 — 86,983 — 87,912 Cash and cash equivalents as of the end of the period $ 885 $ 4 $ — $ 117,973 $ — $ 118,862 |