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, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Assets Cash and cash equivalents $ 1,255 $ 51 $ — $ 12,338 $ — $ 13,644 Receivables, net — 2,212 — 146,096 — 148,308 Inventories — 1,741 5,237 15,735 — 22,713 Prepaid and other current assets 61 14,422 908 2,102 — 17,493 Intercompany receivable — 1,327,833 — 500,583 (1,828,416 ) — Total current assets 1,316 1,346,259 6,145 676,854 (1,828,416 ) 202,158 Property, plant and equipment, net — 1,858,264 615,549 1,814,809 — 4,288,622 Intangible assets, net — 49,107 — 683,949 — 733,056 Goodwill — 149,453 170,652 716,871 — 1,036,976 Investment in wholly owned subsidiaries 3,355,636 1,750,256 1,425,283 857,485 (7,388,660 ) — Other long-term assets, net 304 54,429 26,716 6,879 — 88,328 Total assets $ 3,357,256 $ 5,207,768 $ 2,244,345 $ 4,756,847 $ (9,217,076 ) $ 6,349,140 Liabilities, Mezzanine Equity and Partners’ Equity Accounts payable $ 6,460 $ 39,680 $ 6,331 $ 90,650 $ — $ 143,121 Short-term debt — 18,500 — — — 18,500 Accrued interest payable — 36,253 — 40 — 36,293 Accrued liabilities 1,280 24,858 8,082 67,773 — 101,993 Taxes other than income tax 125 7,285 4,718 6,955 — 19,083 Income tax payable — 457 2 3,986 — 4,445 Intercompany payable 472,790 — 1,355,626 — (1,828,416 ) — Total current liabilities 480,655 127,033 1,374,759 169,404 (1,828,416 ) 323,435 Long-term debt — 3,050,531 — 61,465 — 3,111,996 Deferred income tax liability — 1,675 9 10,744 — 12,428 Other long-term liabilities — 28,392 12,348 38,818 — 79,558 Series D preferred units 563,992 — — — — 563,992 Total partners’ equity 2,312,609 2,000,137 857,229 4,476,416 (7,388,660 ) 2,257,731 Total liabilities, mezzanine equity and partners’ equity $ 3,357,256 $ 5,207,768 $ 2,244,345 $ 4,756,847 $ (9,217,076 ) $ 6,349,140 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 Prepaid and 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 Income (Loss) For the Year Ended December 31, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Revenues $ — $ 485,603 $ 260,679 $ 1,216,180 $ (705 ) $ 1,961,757 Costs and expenses 2,407 317,286 163,667 1,115,539 (705 ) 1,598,194 Operating (loss) income (2,407 ) 168,317 97,012 100,641 — 363,563 Equity in earnings of subsidiaries 207,973 17,167 121,913 212,249 (559,302 ) — Interest income (expense), net 228 (191,835 ) (7,127 ) 12,497 — (186,237 ) Other income, net — 3,876 446 35,554 — 39,876 Income (loss) before income tax expense (benefit) 205,794 (2,475 ) 212,244 360,941 (559,302 ) 217,202 Income tax expense (benefit) — 588 (3 ) 10,823 — 11,408 Net income (loss) $ 205,794 $ (3,063 ) $ 212,247 $ 350,118 $ (559,302 ) $ 205,794 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 Comprehensive Income For the Year Ended December 31, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ 205,794 $ (3,063 ) $ 212,247 $ 350,118 $ (559,302 ) $ 205,794 Other comprehensive income: Foreign currency translation adjustment — — — 4,304 — 4,304 Net gain on pension and other postretirement benefit adjustments, net of tax expense — — — 2,334 — 2,334 Net gain on cash flow hedges — 23,411 — — — 23,411 Total other comprehensive income — 23,411 — 6,638 — 30,049 Comprehensive income $ 205,794 $ 20,348 $ 212,247 $ 356,756 $ (559,302 ) $ 235,843 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 benefit — — — (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 Cash Flows For the Year Ended December 31, 2018 (Thousands of Dollars) NuStar Energy NuStar Logistics NuPOP Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 444,233 $ 100,385 $ 179,512 $ 514,936 $ (694,859 ) $ 544,207 Cash flows from investing activities: Capital expenditures — (71,044 ) (19,152 ) (367,256 ) — (457,452 ) Change in accounts payable related to capital expenditures — 11,101 (5,161 ) (13,623 ) — (7,683 ) Acquisitions — — (37,502 ) — — (37,502 ) Proceeds from insurance recoveries — — — 78,419 — 78,419 Proceeds from sale of European operations — — — 266,740 — 266,740 Proceeds from sale or disposition of assets — 2,674 31 995 — 3,700 Investment in subsidiaries (708,600 ) (1,711,975 ) (54,600 ) (54,665 ) 2,529,840 — Net cash used in investing activities (708,600 ) (1,769,244 ) (116,384 ) (89,390 ) 2,529,840 (153,778 ) Cash flows from financing activities: Debt borrowings — 1,840,853 — 31,800 — 1,872,653 Debt repayments — (2,349,476 ) — (32,300 ) — (2,381,776 ) Issuance of Series D preferred units 590,000 — — — — 590,000 Payment of issuance costs for Series D preferred units (34,203 ) — — — — (34,203 ) Issuance of common units, net of issuance costs 10,000 — — — — 10,000 General partner contribution 204 — — — — 204 Distributions to preferred unitholders (90,670 ) (45,336 ) (45,336 ) (45,335 ) 136,007 (90,670 ) Distributions to common unitholders and general partner (300,777 ) (150,388 ) (150,388 ) (150,408 ) 451,184 (300,777 ) Cash consideration for Merger (Note 4) (67,936 ) — — 141 — (67,795 ) Proceeds from termination of interest rate swaps — 8,048 — — — 8,048 Contributions from affiliates — 599,400 54,600 1,768,172 (2,422,172 ) — Net intercompany activity 162,498 1,766,881 77,996 (2,007,375 ) — — Other, net (4,379 ) (1,101 ) — (71 ) — (5,551 ) Net cash provided by (used in) financing activities 264,737 1,668,881 (63,128 ) (435,376 ) (1,834,981 ) (399,867 ) Effect of foreign exchange rate changes on cash — — — (1,210 ) — (1,210 ) Net increase (decrease) in cash and cash equivalents 370 22 — (11,040 ) — (10,648 ) 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 $ 1,255 $ 51 $ — $ 12,338 $ — $ 13,644 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 538,560 — — — — 538,560 Issuance of common units, net of 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 |