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 June 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Assets Cash and cash equivalents $ 896 $ 1,777 $ — $ 17,671 $ — $ 20,344 Receivables, net 204 61 — 141,886 — 142,151 Inventories — 1,913 8,408 17,750 — 28,071 Other current assets 78 16,119 1,838 8,491 — 26,526 Intercompany receivable 56,954 2,825,858 — — (2,882,812 ) — Total current assets 58,132 2,845,728 10,246 185,798 (2,882,812 ) 217,092 Property, plant and equipment, net — 1,857,862 622,399 1,979,420 — 4,459,681 Intangible assets, net — 53,819 — 704,948 — 758,767 Goodwill — 149,453 170,652 774,556 — 1,094,661 Investment in wholly owned subsidiaries 2,837,072 20,557 1,436,981 861,102 (5,155,712 ) — Other long-term assets, net 3,391 73,591 26,944 12,842 — 116,768 Total assets $ 2,898,595 $ 5,001,010 $ 2,267,222 $ 4,518,666 $ (8,038,524 ) $ 6,646,969 Liabilities, Mezzanine Equity and Partners’ Equity Accounts payable $ 4,169 $ 25,949 $ 6,810 $ 90,873 $ — $ 127,801 Short-term debt — 63,000 — — — 63,000 Accrued interest payable — 36,144 — 48 — 36,192 Accrued liabilities 608 21,666 8,016 34,429 — 64,719 Taxes other than income tax 6 5,368 4,828 6,018 — 16,220 Income tax payable — 231 — 3,126 — 3,357 Intercompany payable — — 1,372,863 1,509,949 (2,882,812 ) — Total current liabilities 4,783 152,358 1,392,517 1,644,443 (2,882,812 ) 311,289 Long-term debt, less current portion — 3,324,389 — 55,977 — 3,380,366 Deferred income tax liability — 1,262 12 21,839 — 23,113 Other long-term liabilities — 44,622 13,793 46,598 — 105,013 Series D preferred units 370,711 — — — — 370,711 Total partners’ equity 2,523,101 1,478,379 860,900 2,749,809 (5,155,712 ) 2,456,477 Total liabilities, mezzanine equity and partners’ equity $ 2,898,595 $ 5,001,010 $ 2,267,222 $ 4,518,666 $ (8,038,524 ) $ 6,646,969 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 Accounts payable $ 4,078 $ 27,642 $ 13,160 $ 101,052 $ — $ 145,932 Short-term debt — 35,000 — — — 35,000 Current portion of long-term debt — 349,990 — — — 349,990 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 Statements of Comprehensive Income For the Three Months Ended June 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 117,862 $ 66,505 $ 301,984 $ (147 ) $ 486,204 Costs and expenses 538 86,588 42,324 277,063 (147 ) 406,366 Operating (loss) income (538 ) 31,274 24,181 24,921 — 79,838 Equity in earnings of subsidiaries 29,900 1,692 23,145 45,673 (100,410 ) — Interest income (expense), net 37 (50,357 ) (1,724 ) 3,108 — (48,936 ) Other income (expense), net — 1,848 73 (509 ) — 1,412 Income (loss) before income tax expense 29,399 (15,543 ) 45,675 73,193 (100,410 ) 32,314 Income tax expense — 61 — 2,854 — 2,915 Net income (loss) $ 29,399 $ (15,604 ) $ 45,675 $ 70,339 $ (100,410 ) $ 29,399 Comprehensive income (loss) $ 29,399 $ (9,336 ) $ 45,675 $ 61,450 $ (100,410 ) $ 26,778 Condensed Consolidating Statements of Comprehensive Income For the Three Months Ended June 30, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 128,895 $ 50,577 $ 256,363 $ (347 ) $ 435,488 Costs and expenses 486 83,096 37,781 241,068 (347 ) 362,084 Operating (loss) income (486 ) 45,799 12,796 15,295 — 73,404 Equity in earnings (loss) of subsidiaries 26,732 (7,177 ) 22,746 34,141 (76,442 ) — Interest income (expense), net 4 (46,390 ) (1,401 ) 2,175 — (45,612 ) Other income, net — 62 3 23 — 88 Income (loss) before income tax (benefit) expense 26,250 (7,706 ) 34,144 51,634 (76,442 ) 27,880 Income tax (benefit) expense — (365 ) 1 1,994 — 1,630 Net income (loss) $ 26,250 $ (7,341 ) $ 34,143 $ 49,640 $ (76,442 ) $ 26,250 Comprehensive income (loss) $ 26,250 $ (13,592 ) $ 34,143 $ 57,022 $ (76,442 ) $ 27,381 Condensed Consolidating Statements of Comprehensive Income For the Six Months Ended June 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 237,556 $ 122,779 $ 602,099 $ (349 ) $ 962,085 Costs and expenses 1,150 159,004 77,505 546,457 (349 ) 783,767 Operating (loss) income (1,150 ) 78,552 45,274 55,642 — 178,318 Equity in earnings (loss) of subsidiaries 156,613 (557 ) 135,148 177,312 (468,516 ) — Interest income (expense), net 69 (100,383 ) (3,295 ) 6,901 — (96,708 ) Other income, net — 2,324 188 78,652 — 81,164 Income (loss) before income tax expense 155,532 (20,064 ) 177,315 318,507 (468,516 ) 162,774 Income tax expense — 231 1 7,010 — 7,242 Net income (loss) $ 155,532 $ (20,295 ) $ 177,314 $ 311,497 $ (468,516 ) $ 155,532 Comprehensive income $ 155,532 $ 4,784 $ 177,314 $ 304,721 $ (468,516 ) $ 173,835 Condensed Consolidating Statements of Comprehensive Income For the Six Months Ended June 30, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 252,524 $ 102,818 $ 568,210 $ (634 ) $ 922,918 Costs and expenses 995 159,418 67,587 525,009 (634 ) 752,375 Operating (loss) income (995 ) 93,106 35,231 43,201 — 170,543 Equity in earnings (loss) of subsidiaries 85,177 (6,067 ) 48,961 81,494 (209,565 ) — Interest income (expense), net 8 (83,304 ) (2,705 ) 3,975 — (82,026 ) Other income, net — 83 9 136 — 228 Income before income tax (benefit) expense 84,190 3,818 81,496 128,806 (209,565 ) 88,745 Income tax (benefit) expense — (34 ) 2 4,587 — 4,555 Net income $ 84,190 $ 3,852 $ 81,494 $ 124,219 $ (209,565 ) $ 84,190 Comprehensive income (loss) $ 84,190 $ (561 ) $ 81,494 $ 133,526 $ (209,565 ) $ 89,084 Condensed Consolidating Statements of Cash Flows For the Six Months Ended June 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 200,803 $ 31,209 $ 58,105 $ 261,300 $ (307,567 ) $ 243,850 Cash flows from investing activities: Capital expenditures — (17,136 ) (8,164 ) (223,221 ) — (248,521 ) Change in accounts payable related to capital expenditures — 495 (5,173 ) (14,642 ) — (19,320 ) Proceeds from sale or disposition of assets — 1,385 16 696 — 2,097 Proceeds from insurance recoveries — — — 78,419 — 78,419 Acquisitions — — (37,502 ) — — (37,502 ) Net cash used in investing activities — (15,256 ) (50,823 ) (158,748 ) — (224,827 ) Cash flows from financing activities: Debt borrowings — 1,122,272 — 11,000 — 1,133,272 Debt repayments — (1,316,621 ) — (16,900 ) — (1,333,521 ) Issuance of Series D preferred units 400,000 — — — — 400,000 Payment of issuance costs for Series D preferred units (29,289 ) — — — — (29,289 ) Issuance of common units 10,000 — — — — 10,000 Distributions to preferred unitholders (32,713 ) (16,356 ) (16,357 ) (16,358 ) 49,071 (32,713 ) Distributions to common unitholders and general partner (172,324 ) (86,162 ) (86,162 ) (86,172 ) 258,496 (172,324 ) Proceeds from termination of interest rate swaps — 8,048 — — — 8,048 Net intercompany activity (374,973 ) 279,080 95,237 656 — — Other, net (1,493 ) (4,466 ) — (64 ) — (6,023 ) Net cash used in financing activities (200,792 ) (14,205 ) (7,282 ) (107,838 ) 307,567 (22,550 ) Effect of foreign exchange rate changes on cash — — — (421 ) — (421 ) Net increase (decrease) in cash and cash equivalents 11 1,748 — (5,707 ) — (3,948 ) Cash and cash equivalents as of the beginning of the period 885 29 — 23,378 — 24,292 Cash and cash equivalents as of the end of the period $ 896 $ 1,777 $ — $ 17,671 $ — $ 20,344 Condensed Consolidating Statements of Cash Flows For the Six Months Ended June 30, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 225,566 $ 85,203 $ 45,790 $ 192,692 $ (340,263 ) $ 208,988 Cash flows from investing activities: Capital expenditures — (19,639 ) (5,588 ) (83,622 ) — (108,849 ) Change in accounts payable related to capital expenditures — (2,823 ) (35 ) 9,709 — 6,851 Proceeds from sale or disposition of assets — 1,898 12 56 — 1,966 Investment in subsidiaries (1,262,000 ) — — (126 ) 1,262,126 — Proceeds from Axeon term loan — 110,000 — — — 110,000 Acquisitions — — — (1,476,719 ) — (1,476,719 ) Net cash (used in) provided by investing activities (1,262,000 ) 89,436 (5,611 ) (1,550,702 ) 1,262,126 (1,466,751 ) Cash flows from financing activities: Debt borrowings — 1,536,761 — 65,400 — 1,602,161 Debt repayments — (1,625,739 ) — (70,500 ) — (1,696,239 ) Note offering, net of issuance costs — 543,313 — — — 543,313 Issuance of other preferred units, net of issuance costs 371,802 — — — — 371,802 Issuance of common units, net of issuance costs 643,858 — — — — 643,858 General partner contribution 13,597 — — — — 13,597 Distributions to preferred unitholders (10,696 ) (5,348 ) (5,348 ) (5,348 ) 16,044 (10,696 ) Distributions to common unitholders and general partner (216,139 ) (108,070 ) (108,069 ) (108,080 ) 324,219 (216,139 ) Contributions from affiliates — 1,262,000 — 126 (1,262,126 ) — Net intercompany activity 236,622 (1,778,816 ) 73,237 1,468,957 — — Other, net (2,613 ) 1,319 1 (1 ) — (1,294 ) Net cash provided by (used) in financing activities 1,036,431 (174,580 ) (40,179 ) 1,350,554 (921,863 ) 1,250,363 Effect of foreign exchange rate changes on cash — — — 649 — 649 Net (decrease) increase in cash and cash equivalents (3 ) 59 — (6,807 ) — (6,751 ) 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 $ 867 $ 64 $ — $ 28,260 $ — $ 29,191 |