![]() UBS MLP Conference September 1-2, 2010 Exhibit 99.1 |
![]() Statements contained in this presentation that state management’s expectations or predictions of the future are forward-looking statements as defined by federal securities law. The words “believe,” “expect,” “should,” “targeting,” “estimates,” and other similar expressions identify forward- looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see NuStar Energy L.P.’s and NuStar GP Holdings, LLC’s respective annual reports on Form 10-K and quarterly reports on Form 10-Q, filed with the Securities and Exchange Commission and available on NuStar’s websites at www.nustarenergy.com and www.nustargpholdings.com. Forward Looking Statements 2 |
![]() NuStar Overview 3 |
![]() NuStar Energy L.P. (NYSE: NS) is a leading publicly traded partnership with a market capitalization of around $3.7 billion and an enterprise value of approximately $5.6 billion NuStar GP Holdings, LLC (NYSE: NSH) holds the 2% general partner interest, incentive distribution rights and 15.5% of the common units in NuStar Energy L.P. with a market capitalization of around $1.3 billion NuStar Overview – Two Publicly Traded Companies NS NSH IPO Date: 4/16/2001 7/19/2006 Unit Price (8/26/10): $57.65 $29.20 Annual Distribution/Unit: $4.26 $1.84 Yield (8/26/10): 7.39% 6.30% Debt Balance (6/30/10 Pro Forma) $1,949 million $19.5 million Market Capitalization: (8/26/10) $3,725 million $1,242 million Enterprise Value (8/26/10 Pro Forma) $5,640 million $1,260 million Total Assets (6/30/10) $5,051 million $612 million Debt/Cap. (6/30/10 Pro Forma) 42.0% n/a Credit Ratings – Moody’s Baa3/Stable n/a S&P and Fitch BBB-/Stable n/a 4 83.1% Membership Interest 82.5% L.P. Interest Public Unitholders 35.4 Million NSH Units Public Unitholders 54.4 Million NS Units 16.9% Membership Interest 2.0% G.P. Interest 15.5% L.P. Interest Incentive Distribution Rights William E. Greehey 7.2 Million NSH Units NYSE: NSH NYSE: NS |
![]() Large and Diverse Geographic Footprint with Assets in Key Locations 5 Asset Stats: Operations in eight different countries including the U.S., Mexico, Netherlands, Netherlands Antilles (i.e. Caribbean), England, Ireland, Scotland and Canada 8,417 miles of crude oil and refined product pipelines Own 89 terminal and storage facilities Over 93 million barrels of storage capacity 2 asphalt refineries on the U.S. East Coast capable of processing 104,000 bpd of crude oil |
![]() Global Leader in Independent Liquids Storage NuStar is the fourth largest independent liquids terminal operator in the world and second largest in the U.S. Of the roughly 93 million barrels of storage capacity, approximately 52 million barrels are crude oil and heavy fuel products, 39 million barrels are refined products and 2 million barrels are biofuels Source: Company Websites & Management Presentations 6 |
![]() Percentage of 2009 Segment Operating Income Approximately 84% of NuStar Energy’s segment operating income in 2009 came from fee-based transportation and storage segments Remainder of 2009 segment operating income related to margin-based asphalt and fuels marketing segment Storage: 46% Transportation: 38% Refined Product Terminals Crude Oil Storage Refined Product Pipelines* Crude Oil Pipelines Asphalt & Fuels Marketing: 16% Asphalt Fuels Marketing Product Supply, Wholesale and Fuel Oil Marketing Bunkering Diversified Operations from Three Business Segments * Includes primarily distillates, gasoline, propane, jet fuel, ammonia and other light products. Does not include natural gas. 7 |
![]() Increasing Distributable Cash Flows 8 NS Distributable Cash Flows ($ in Millions) 1 2001 2002 2003 2004 2005 2006 2007 2008 2009 $56 $68 $86 $102 $154 $214 $221 $319 $346 1 – Please see slide 24 for a reconciliation of Distributable Cash Flow to its most directly comparable GAAP measure, Net Income |
![]() NuStar Energy L.P.’s Distribution has been Covered by the Non-Asphalt Operations Distributable Cash Flows Since Asphalt Acquisition in March 2008 Jan 1, 2008 – June 30, 2010 Non-Asphalt Operations Distributable Cash Flows 1 $739.7* Total Distribution 676.4 Excess Distributable Cash Flows $63.3 % of Distribution Covered by Non-Asphalt Operations Distributable Cash Flows 109% Asphalt Operations EBITDA 1 $194.5 Asphalt Operations Distributable Cash Flows 1 $74.0 * Includes transportation, storage and fuels marketing operations 9 (Dollars in Millions) 1 – Please see slide 27 for a reconciliation of Non-Asphalt Operations Distributable Cash Flows, Asphalt Operations Distributable Cash Flows, and Asphalt Operations EBITDA to their most comparable GAAP measure, Operating Income |
![]() Source: Barclay’s Capital 10 NS 7% S&P 500 (4)% Alerian MLP Index 10% NSH Peers 30% NSH 14% Total Return – 2010 Year To Date NuStar Companies Valuations Hurt since First Quarter Earnings Results Release NS and NSH traded above their peers and the Alerian index until late April 2010 Unit prices have been impacted significantly by reduced 2010 earnings expectations for NuStar’s asphalt operations EBITDA growth from our $500 million internal growth program and additional asset acquisitions should cause our unit valuations to improve over the next couple of years. -20% -10% 0% 10% 20% 30% 40% 50% 12/31/09 2/2/10 3/8/10 4/11/10 5/15/10 6/18/10 7/22/10 8/25/10 |
![]() Business Segment Overviews 11 |
![]() 12 2010 results expected to be comparable to 2009 Expect NuStar’s throughput volumes to increase one to two percent in 2010 compared to 2009, excluding the impact of certain assets sales Recently announced refinery closures and proposed refinery sales not expected to impact NuStar’s results Based on 2009 PPI figures, tariffs will decrease by (1.3%) starting July 1, 2010 2010 calendar year rates should be slightly higher than 2009 calendar year rates First six months of 2010 benefitting from 7.6% tariff increase on July 1, 2009 Transportation Segment EBITDA ($ in Millions) 1 2009 Pipeline Receipts by Commodity Transportation Segment Overview Gasoline 32% Other* 68% *Other includes crude oil, fuel oil, ammonia, jet fuel, propane, naphtha and light refined product ends 1 – Please see slide 25 for a reconciliation of Transportation Segment EBITDA to its most directly comparable GAAP measure, Operating Income |
![]() 2006 2007 2008 2009 $162 $177 $208 $242 13 2010 results expected to be $22 to $26 million higher than 2009 NuStar has generated strong earnings growth in its storage segment mainly due to: $400 million construction program started in 2006 and completed in 2009 Higher rates on storage contract renewals Refined product demand growth outside the U.S. should continue to benefit companies like NuStar that are developing international storage opportunities Storage Segment EBITDA ($ in Millions) 1 Storage Contract Renewals (% of Revenues) 1 Year or Less 1 to 3 Years 3 to 5 Years Greater Than 5 Years We continue to sign up large credit worthy customers under long-term contracts Since approximately 90% of our revenues come from leased assets, throughputs are not expected to have a material impact on storage results Storage Segment Overview 1 – Please see slide 25 for a reconciliation of Storage Segment EBITDA to its most directly comparable GAAP measure, Operating Income |
![]() 14 Asphalt and Fuels Marketing Overview Asphalt and Fuels Marketing Segment EBITDA ($ in Millions) 1 Expect slightly improved results from our asphalt and fuels marketing segment in 2010 Federal stimulus fund outlays and state & local highway awards expected to increase in 2010 Of the $27.5 billion of total federal funds available for highway projects, approximately $10 - $11 billion expected to be spent in 2010 Up from the $5.6 billion spent in 2009 Weak private sector demand for asphalt expected to impact margins in the second half of 2010 Improved results in our bunker fuel sales, fuel oil sales and refined products trading should contribute to improved results. 1 – Please see slide 26 for a reconciliation of Asphalt and Fuels Marketing Segment EBITDA to its most directly comparable GAAP measure, Operating Income |
![]() Financial Overview 15 |
![]() 6/30/10 Pro Forma Revolver Availability Rate on revolver based on LIBOR plus 50 bps, currently around 0.90% Financial Covenant Tests: Debt-to-EBITDA cannot exceed 5.0 times Following an acquisition of $100 million or more, Debt-to-EBITDA limit increases to 5.5 times for two consecutive quarters Revolver Availability & Credit Ratings/Metrics 16 Total Bank Credit $1,212 Less: Borrowings (100) Letters of Credit Go Zone Financing (157) Other (4) Revolver Availability $951 Standard & Poor’s: BBB- (Stable Outlook) Moody’s: Baa3 (Stable Outlook) Fitch: BBB- (Stable Outlook) Debt/EBITDA (6/30/10): 4.5x Debt/Capitalization (6/30/10): 40.7% Credit Ratings/Metrics (Dollars in Millions) Pro Forma revolver availability includes revolver pay down of $446 million from net proceeds received from the August 12, 2010 issuance of $450 Million of Senior Notes. Pro Forma also includes $101 million letter of credit issued to support GoZone financing that closed on July 15, 2010. |
![]() $1.2 billion Credit Facility $100 NuStar Logistics Notes (4.80%) 449 NuStar Logistics Notes (7.65%) 349 NuStar Logistics Notes (6.875%) 103 NuStar Logistics Notes (6.05%) 238 NuStar Pipeline Notes (5.875%) 256 NuStar Pipeline Notes (7.75%) 263 Other Debt 191 Total Debt $1,949 Total Partners’ Equity 2,695 Total Capitalization $4,644 (Dollars in Millions) No Significant Debt Maturities Until 2012 2010 $0.8 2011 $0.8 2012 $498* 2013 $495 2014 $0 Thereafter $954 * Primarily includes maturity of $100 million revolver balance and $366 million of senior notes 6/30/10 Pro Forma Capital Structure 6/30/10 Pro Forma Maturities 17 No significant debt maturities until 2012 at which time the revolver and some senior notes become due Debt values are adjusted for unamortized discounts and fair value adjustments as of June 30, 2010 |
![]() 2010 Internal Growth Capital Spending 18 Transportation Storage Asphalt & Fuels Marketing 2010 internal growth spending includes projects to: Build new storage for large creditworthy customers under long-term contracts (i.e. 5 to 8 years) St. Eustatius Texas City St. James Develop new crude supply logistics to capitalize on heavy crude oil imbalances ~90% of 2010 Internal growth spending focused on fee based businesses Capex program is discretionary and has internal rates of return typically in the 15- 20% range (Dollars in Millions) 142 198 163 |
![]() 2010 Reliability Capital & Acquisition Overview 19 Reliability capital spending projected to be approximately $55 million Plan to spend ~$30 million on new Corporate Office Building in 2010 Total capital spending in 2010, including the $198 million of internal growth capex, expected to be $290 million Expect to spend $100 million on two fee-based terminal acquisitions $44.1 million May acquisition of 3 terminals in Mobile County, Alabama Recently announced $50 to $60 million terminal acquisition in Turkey, expected to close October 2010 |
![]() $500 Million Internal Growth Capital Program continues through 2013 20 (Dollars in Millions) 1 – Please see slide 28 for a reconciliation of incremental EBITDA, associated with NuStar Energy’s $500 million internal growth capital program, to its most directly comparable GAAP measure, Operating Income 75 Incremental EBITDA 1 from these growth projects is estimated to be: $10 to $15 million in 2010 $35 to $45 million in 2011 $20 to $30 million per year in 2012 and 2013 Majority of incremental EBITDA will be generated on fee based side of the business St. Eustatius storage St. James storage & crude supply logistics projects South Texas Eagle Ford shale crude project $500 Million Internal Growth Program Spending Forecast 193 |
![]() High quality, large and diverse asset footprint supporting energy infrastructure both in the U.S. and internationally Contracted fee-based storage and transportation assets provide stable cash flows, delivering 84% of 2009 operating income Fourth largest independent liquids terminal operator in the world Diverse and high quality customer base composed of large integrated oil companies, national oil companies and refiners Strong balance sheet, credit metrics and commitment to maintain investment grade credit ratings demonstrated by equity issuances in May 2010 and November 2009 Lower cost of capital than majority of peers Experienced and proven management team with substantial equity ownership and industry experience Recognized nationally for safety and environmental record as well as one of the best places to work Investment Highlights 21 |
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![]() 23 Appendix |
![]() 24 Reconciliation of Non-GAAP Financial Information EBITDA and Distributable Cash Flow (Unaudited, Dollars in Thousands) The following is a reconciliation of net income to EBITDA and distributable cash flow: 2001 2002 2003 2004 2005 2006 2007 2008 2009 Net income 45,873 $ 55,143 $ 69,593 $ 78,418 $ 107,675 $ 149,906 $ 150,298 $ 254,018 $ 224,875 $ Plus interest expense, net 3,811 4,880 15,860 20,950 41,388 66,266 76,516 90,818 79,384 Plus income tax expense - 395 - - 4,713 5,861 11,448 11,006 10,531 Plus depreciation and amortization expense 13,390 16,440 26,267 33,149 64,895 100,266 114,293 135,709 145,743 EBITDA 63,074 76,858 111,720 132,517 218,671 322,299 352,555 491,551 460,533 Less equity earnings from joint ventures 3,179 3,188 2,416 1,344 2,319 5,882 6,833 8,030 9,615 Less interest expense, net 3,811 4,880 15,860 20,950 41,388 66,266 76,516 90,818 79,384 Less reliability capital expenditures 2,786 3,943 10,353 9,701 23,707 35,803 40,337 55,669 45,163 Less income tax expense - - - - 4,713 5,861 11,448 11,006 10,531 Plus mark-to-market impact on hedge transactions - - - - - - 3,131 (9,784) 19,970 Plus charges reimbursed by general partner - - - - - 575 - - - Plus distributions from joint ventures 2,874 3,590 2,803 1,373 4,657 5,141 544 2,835 9,700 Plus other non-cash items - - - - 2,672 - - - - Distributable cash flow 56,172 $ 68,437 $ 85,894 $ 101,895 $ 153,873 $ 214,203 $ 221,096 $ 319,079 $ 345,510 $ Note: 2005 and 2006 distributable cash flow and EBITDA are from continuing operations. Year Ended December 31, NuStar Energy L.P. utilizes two financial measures, EBITDA and distributable cash flow, which are not defined in United States generally accepted accounting principles (GAAP). Management uses these financial measures because they are a widely accepted financial indicators used by investors to compare partnership performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the partnership's assets and the cash that the business is generating. Neither EBITDA nor distributable cash flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income. They should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP. |
![]() 25 Reconciliation of Non-GAAP Financial Information: Transportation and Storage (Unaudited, Dollars in Thousands) The following is a reconciliation of operating income to EBITDA for the Transportation Segment: 2006 2007 2008 2009 Operating income 122,714 $ 126,508 $ 135,086 $ 139,869 $ Plus depreciation and amortization expense 47,145 49,946 50,749 50,528 EBITDA 169,859 $ 176,454 $ 185,835 $ 190,397 $ The following is a reconciliation of operating income to EBITDA for the Storage Segment: 2006 2007 2008 2009 Operating income 108,486 $ 114,635 $ 141,079 $ 171,245 $ Plus depreciation and amortization expense 53,121 62,317 66,706 70,888 EBITDA 161,607 $ 176,952 $ 207,785 $ 242,133 $ Year Ended December 31, Year Ended December 31, EBITDA in the following reconciliations relate to our reportable segments or a portion of a reportable segment. We do not allocate general and administrative expenses to our reportable segments because those expenses relate primarily to the overall management at the entity level. Therefore, EBITDA reflected in the following reconciliations excludes any allocation of general and administrative expenses consistent with our policy for determining segmental operating income, the most directly comparable GAAP measure. EBITDA is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. EBITDA should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP. |
![]() 26 Reconciliation of Non-GAAP Financial Information: Asphalt and Fuels Marketing (Unaudited, Dollars in Thousands) The following is a reconciliation of operating income to EBITDA for the Asphalt and Fuels Marketing Segment: Asphalt and Fuels Marketing Segment Less Fuels Marketing Operations Asphalt Operations Operating income 112,506 $ 36,239 $ 76,267 $ Plus depreciation and amortization expense 14,734 552 14,182 EBITDA 127,240 $ 36,791 $ 90,449 $ Asphalt and Fuels Marketing Segment Less Fuels Marketing Operations Asphalt Operations Operating income 60,629 $ 9,919 $ 50,710 $ Plus depreciation and amortization expense 19,463 - 19,463 EBITDA 80,092 $ 9,919 $ 70,173 $ Asphalt and Fuels Marketing Segment Less Fuels Marketing Operations Asphalt Operations Operating income 39,656 $ 15,857 $ 23,799 $ Plus depreciation and amortization expense 10,116 42 10,074 EBITDA 49,772 $ 15,899 $ 33,873 $ Year Ended December 31, 2008 Year Ended December 31, 2009 Six Month Ended June 30, 2010 EBITDA in the following reconciliations relate to our reportable segments or a portion of a reportable segment. We do not allocate general and administrative expenses to our reportable segments because those expenses relate primarily to the overall management at the entity level. Therefore, EBITDA reflected in the following reconciliations excludes any allocation of general and administrative expenses consistent with our policy for determining segmental operating income, the most directly comparable GAAP measure. EBITDA is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. EBITDA should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP. |
![]() 27 Reconciliation of Non-GAAP Financial Information: Asphalt and Fuels Marketing - continued (Unaudited, Dollars in Thousands) The following is a reconciliation of operating income to EBITDA and distributable cash flow for our asphalt operations: Year Ended December 31, 2008 Year Ended December 31, 2009 Six Month Ended June 30, 2010 Jan 1, 2008 - June 30, 2010 Asphalt operations operating income 76,267 $ 50,710 $ 23,799 $ 150,776 $ Plus depreciation and amortization associated with asphalt operations 14,182 19,463 10,074 43,719 Asphalt operations EBITDA 90,449 70,173 33,873 194,495 Allocated to asphalt operations for distributable cash flow purposes: Less general & administrative expense 18,640 16,105 10,489 45,234 Less interest expense 20,150 26,056 13,925 60,131 Less income tax expense - 489 140 629 Less reliability capital expenditures 4,126 6,962 3,397 14,485 Asphalt operations distributable cash flow 47,533 $ 20,561 $ 5,922 $ 74,016 $ Distributable cash flow 319,079 $ 345,510 $ 149,170 $ 813,759 $ Less asphalt operations distributable cash flow 47,533 20,561 5,922 74,016 Non-asphalt operations distributable cash flow 271,546 $ 324,949 $ 143,248 $ 739,743 $ EBITDA in the following reconciliations relate to our reportable segments or a portion of a reportable segment. We do not allocate general and administrative expenses to our reportable segments because those expenses relate primarily to the overall management at the entity level. Therefore, EBITDA reflected in the following reconciliations excludes any allocation of general and administrative expenses consistent with our policy for determining segmental operating income, the most directly comparable GAAP measure. EBITDA is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. EBITDA should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP. |
![]() Reconciliation of Non-GAAP Financial Information: $500 Million Internal Growth Program 28 (Unaudited, Dollars in Thousands) Combined 2010 2011 2012 & 2013 Projected incremental operating income range $ 9,000 - 13,000 $ 29,000 - 38,000 $ 11,000 - 20,000 Plus projected incremental depreciation and amortization expense range 1,000 - 2,000 6,000 - 7,000 9,000 - 10,000 Projected incremental EBITDA range $ 10,000 - 15,000 $ 35,000 - 45,000 $ 20,000 - 30,000 The following is a reconciliation of projected incremental operating income to projected incremental EBITDA related to our $500 million internal growth program: EBITDA in the following reconciliations relate to our reportable segments or a portion of a reportable segment. We do not allocate general and administrative expenses to our reportable segments because those expenses relate primarily to the overall management at the entity level. Therefore, EBITDA reflected in the following reconciliations excludes any allocation of general and administrative expenses consistent with our policy for determining segmental operating income, the most directly comparable GAAP measure. EBITDA is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. EBITDA should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP. |