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 September 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Assets Cash and cash equivalents $ 1,164 $ 4,238 $ — $ 19,177 $ — $ 24,579 Receivables, net — 82 — 164,686 — 164,768 Inventories — 1,875 6,822 16,064 — 24,761 Other current assets 122 16,961 1,284 44,399 — 62,766 Intercompany receivable 187,967 2,726,465 — — (2,914,432 ) — Total current assets 189,253 2,749,621 8,106 244,326 (2,914,432 ) 276,874 Property, plant and equipment, net — 1,846,330 619,284 2,019,234 — 4,484,848 Intangible assets, net — 51,463 — 694,449 — 745,912 Goodwill — 149,453 170,652 774,556 — 1,094,661 Investment in wholly owned subsidiaries 2,793,521 29,961 1,450,865 849,825 (5,124,172 ) — Other long-term assets, net 303 77,144 26,861 14,355 — 118,663 Total assets $ 2,983,077 $ 4,903,972 $ 2,275,768 $ 4,596,745 $ (8,038,604 ) $ 6,720,958 Liabilities, Mezzanine Equity and Partners’ Equity Accounts payable $ 13,636 $ 26,423 $ 5,935 $ 108,218 $ — $ 154,212 Short-term debt — 10,500 — — — 10,500 Accrued interest payable — 30,785 — 60 — 30,845 Accrued liabilities 929 16,608 7,971 71,790 — 97,298 Taxes other than income tax 63 7,152 5,893 6,587 — 19,695 Income tax payable — 364 — 4,212 — 4,576 Intercompany payable — — 1,393,208 1,521,224 (2,914,432 ) — Total current liabilities 14,628 91,832 1,413,007 1,712,091 (2,914,432 ) 317,126 Long-term debt, less current portion — 3,313,528 — 63,324 — 3,376,852 Deferred income tax liability — 1,262 12 22,069 — 23,343 Other long-term liabilities — 45,099 13,124 38,688 — 96,911 Series D preferred units 559,844 — — — — 559,844 Total partners’ equity 2,408,605 1,452,251 849,625 2,760,573 (5,124,172 ) 2,346,882 Total liabilities, mezzanine equity and partners’ equity $ 2,983,077 $ 4,903,972 $ 2,275,768 $ 4,596,745 $ (8,038,604 ) $ 6,720,958 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 September 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 127,165 $ 62,981 $ 300,323 $ (106 ) $ 490,363 Costs and expenses 600 76,932 40,497 277,163 (106 ) 395,086 Operating (loss) income (600 ) 50,233 22,484 23,160 — 95,277 Equity in earnings of subsidiaries 48,668 9,405 13,884 34,607 (106,564 ) — Interest income (expense), net 68 (45,532 ) (1,882 ) 2,521 — (44,825 ) Other income, net — 468 119 333 — 920 Income before income tax expense 48,136 14,574 34,605 60,621 (106,564 ) 51,372 Income tax expense — 82 — 3,154 — 3,236 Net income $ 48,136 $ 14,492 $ 34,605 $ 57,467 $ (106,564 ) $ 48,136 Comprehensive income $ 48,136 $ 19,751 $ 34,605 $ 57,109 $ (106,564 ) $ 53,037 Condensed Consolidating Statements of Comprehensive Income (Loss) For the Three Months Ended September 30, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 127,980 $ 58,871 $ 253,854 $ (139 ) $ 440,566 Costs and expenses 332 77,668 38,709 232,279 (139 ) 348,849 Operating (loss) income (332 ) 50,312 20,162 21,575 — 91,717 Equity in earnings (loss) of subsidiaries 38,896 (4,558 ) 20,809 39,508 (94,655 ) — Interest income (expense), net 28 (46,247 ) (1,455 ) 2,418 — (45,256 ) Other income (expense), net — 57 (8 ) (5,175 ) — (5,126 ) Income (loss) before income tax expense 38,592 (436 ) 39,508 58,326 (94,655 ) 41,335 Income tax expense — 115 1 2,627 — 2,743 Net income (loss) $ 38,592 $ (551 ) $ 39,507 $ 55,699 $ (94,655 ) $ 38,592 Comprehensive income (loss) $ 38,592 $ (1,031 ) $ 39,507 $ 62,069 $ (94,655 ) $ 44,482 Condensed Consolidating Statements of Comprehensive Income For the Nine Months Ended September 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 364,721 $ 185,760 $ 902,422 $ (455 ) $ 1,452,448 Costs and expenses 1,750 235,936 118,002 823,620 (455 ) 1,178,853 Operating (loss) income (1,750 ) 128,785 67,758 78,802 — 273,595 Equity in earnings of subsidiaries 205,281 8,848 149,032 211,919 (575,080 ) — Interest income (expense), net 137 (145,915 ) (5,177 ) 9,422 — (141,533 ) Other income, net — 2,792 307 78,985 — 82,084 Income (loss) before income tax expense 203,668 (5,490 ) 211,920 379,128 (575,080 ) 214,146 Income tax expense — 313 1 10,164 — 10,478 Net income (loss) $ 203,668 $ (5,803 ) $ 211,919 $ 368,964 $ (575,080 ) $ 203,668 Comprehensive income $ 203,668 $ 24,535 $ 211,919 $ 361,830 $ (575,080 ) $ 226,872 Condensed Consolidating Statements of Comprehensive Income (Loss) For the Nine Months Ended September 30, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 380,504 $ 161,689 $ 822,064 $ (773 ) $ 1,363,484 Costs and expenses 1,327 237,086 106,296 757,288 (773 ) 1,101,224 Operating (loss) income (1,327 ) 143,418 55,393 64,776 — 262,260 Equity in earnings (loss) of 124,073 (10,625 ) 69,770 121,002 (304,220 ) — Interest income (expense), net 36 (129,551 ) (4,160 ) 6,393 — (127,282 ) Other income (expense), net — 140 1 (5,039 ) — (4,898 ) Income before income tax expense 122,782 3,382 121,004 187,132 (304,220 ) 130,080 Income tax expense — 81 3 7,214 — 7,298 Net income $ 122,782 $ 3,301 $ 121,001 $ 179,918 $ (304,220 ) $ 122,782 Comprehensive income (loss) $ 122,782 $ (1,592 ) $ 121,001 $ 195,595 $ (304,220 ) $ 133,566 Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 296,475 $ 60,254 $ 90,482 $ 361,320 $ (445,211 ) $ 363,320 Cash flows from investing activities: Capital expenditures — (32,270 ) (14,002 ) (292,168 ) — (338,440 ) Change in accounts payable related to capital expenditures — 2,063 (6,209 ) (14,484 ) — (18,630 ) Proceeds from sale or disposition of assets — 1,464 20 736 — 2,220 Proceeds from insurance recoveries — — — 78,419 — 78,419 Acquisitions — — (37,502 ) — — (37,502 ) Investment in other long-term — — — (3,280 ) — (3,280 ) Net cash used in investing activities — (28,743 ) (57,693 ) (230,777 ) — (317,213 ) Cash flows from financing activities: Debt borrowings — 1,498,853 — 25,100 — 1,523,953 Debt repayments — (1,754,798 ) — (23,700 ) — (1,778,498 ) Issuance of Series D preferred units 590,000 — — — — 590,000 Payment of issuance costs for Series D preferred units (34,187 ) — — — — (34,187 ) Issuance of common units 10,000 — — — — 10,000 General partner contribution 204 — — — — 204 Distributions to preferred unitholders (60,249 ) (30,123 ) (30,124 ) (30,123 ) 90,372 (60,247 ) Distributions to common unitholders and general partner (236,549 ) (118,275 ) (118,274 ) (118,290 ) 354,839 (236,549 ) Cash consideration for Merger (Note 2) (61,411 ) — — 140 — (61,271 ) Proceeds from termination of interest rate swaps — 8,048 — — — 8,048 Net intercompany activity (501,574 ) 373,055 115,609 12,910 — — Other, net (2,430 ) (4,062 ) — (62 ) — (6,554 ) Net cash used in financing activities (296,196 ) (27,302 ) (32,789 ) (134,025 ) 445,211 (45,101 ) Effect of foreign exchange rate changes on cash — — — (719 ) — (719 ) Net increase (decrease) in cash and cash equivalents 279 4,209 — (4,201 ) — 287 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 $ 1,164 $ 4,238 $ — $ 19,177 $ — $ 24,579 Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2017 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 355,864 $ 128,395 $ 72,711 $ 290,917 $ (536,872 ) $ 311,015 Cash flows from investing activities: Capital expenditures — (34,964 ) (18,138 ) (167,515 ) — (220,617 ) Change in accounts payable related to capital expenditures — (1,223 ) 4,445 10,050 — 13,272 Proceeds from sale or disposition of assets — 1,947 17 59 — 2,023 Investment in subsidiaries (1,262,000 ) — — (126 ) 1,262,126 — Proceeds from Axeon term loan — 110,000 — — — 110,000 Acquisitions — — — (1,461,719 ) — (1,461,719 ) Net cash (used in) provided by investing activities (1,262,000 ) 75,760 (13,676 ) (1,619,251 ) 1,262,126 (1,557,041 ) Cash flows from financing activities: Debt borrowings — 1,901,504 — 69,700 — 1,971,204 Debt repayments — (1,856,739 ) — (82,000 ) — (1,938,739 ) 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 (26,681 ) (13,340 ) (13,341 ) (13,342 ) 40,023 (26,681 ) Distributions to common unitholders and general partner (331,222 ) (165,611 ) (165,611 ) (165,627 ) 496,849 (331,222 ) Contributions from affiliates — 1,262,000 — 126 (1,262,126 ) — Net intercompany activity 238,172 (1,873,773 ) 119,917 1,515,684 — — Other, net (3,366 ) (1,486 ) — (218 ) — (5,070 ) Net cash provided by (used) in financing activities 906,160 (204,132 ) (59,035 ) 1,324,323 (725,254 ) 1,242,062 Effect of foreign exchange rate changes on cash — — — 1,637 — 1,637 Net increase (decrease) in cash and cash equivalents 24 23 — (2,374 ) — (2,327 ) Cash and cash equivalents as of the beginning of the period 870 5 — 35,067 — 35,942 Cash and cash equivalents as of the end of the period $ 894 $ 28 $ — $ 32,693 $ — $ 33,615 |