Exhibit 99.1
NuStar GP Holdings, LLC Reports Record Second Quarter 2009 Earnings
and Announces Quarterly Distribution
Earnings Beat Analysts’ Expectations and are the Second Highest of Any
Quarter in the Company’s History
SAN ANTONIO, August 3, 2009 – NuStar GP Holdings, LLC (NYSE: NSH) today announced record second quarter earnings of $21.4 million, or $0.50 per unit, compared to $5.8 million, or $0.14 per unit, for the second quarter of 2008. The second quarter 2009 results represent the second highest quarterly earnings of any quarter in the company’s history behind last year’s $0.82 per unit earned in the third quarter. Distributable cash flow available to unitholders for the second quarter of 2009 was $18.5 million, or $0.44 per unit, compared to $16.2 million, or $0.38 per unit, for the second quarter of 2008.
With respect to the quarterly distribution to unitholders for the second quarter of 2009, NuStar GP Holdings, LLC announced that its board of directors has declared a distribution of $0.43 per unit, which would equate to $1.72 per unit on an annual basis. This quarterly distribution represents an increase of $0.07 per unit, or 19.4 percent, over the $0.36 distribution for the second quarter of 2008. The second quarter 2009 distribution will be paid on August 18, 2009, to holders of record as of August 6, 2009.
“I am excited about our record second quarter earnings, which benefited from solid contributions from NuStar Energy L.P.’s asphalt and storage operations. NuStar Energy L.P.’s expectations for a record year in 2009 should also bode well for record earnings at NuStar GP Holdings, LLC as well as for a distribution increase. The incentive distribution rights associated with the general partner interest will continue to provide enhanced value for our unitholders as NuStar Energy L.P. continues to grow its business and increase its distribution,” said Curt Anastasio, Chief Executive Officer and President of NuStar Energy L.P. and NuStar GP Holdings, LLC.
A conference call with management is scheduled for 3:00 p.m. ET (2:00 p.m. CT) today, August 3, 2009, to discuss the financial results for the second quarter of 2009. Investors interested in listening to the presentation may call 800/622-7620, passcode 19298146. International callers may access the presentation by dialing 706/645-0327, passcode 19298146. The company intends to have a playback available following the presentation, which may be accessed by calling 800/642-1687, passcode 19298146. A live broadcast of the conference call will also be available on the company’s Web site atwww.nustargp.com.
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NuStar GP Holdings, LLC is a publicly traded limited liability company that owns the two percent general partner interest, an 18.4 percent limited partner interest and the incentive distribution rights in NuStar Energy L.P., one of the largest asphalt refiners and marketers in the U.S. and the second largest independent liquids terminal operator in the nation with operations in the United States, the Netherlands Antilles, Canada, Mexico, the Netherlands and the United Kingdom. For more information, visit NuStar GP Holdings, LLC’s Web site atwww.nustargp.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding future events. All forward-looking statements are based on the company’s beliefs as well as assumptions made by and information currently available to the company. These statements reflect the company’s current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in NuStar Energy L.P. and NuStar GP Holdings, LLC’s 2008 annual reports on Form 10-K and subsequent filings with the Securities and Exchange Commission.
NuStar GP Holdings, LLC
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Statement of Income Data: | ||||||||||||||||
Equity in earnings of NuStar Energy L.P. | $ | 21,896 | $ | 6,704 | $ | 34,729 | $ | 22,458 | ||||||||
General and administrative expenses | (720 | ) | (824 | ) | (1,477 | ) | (1,566 | ) | ||||||||
Other income (expense), net | 21 | (82 | ) | (3 | ) | (82 | ) | |||||||||
Interest expense, net | (22 | ) | (67 | ) | (49 | ) | (96 | ) | ||||||||
Income before income tax benefit | 21,175 | 5,731 | 33,200 | 20,714 | ||||||||||||
Income tax benefit | 200 | 49 | 183 | 69 | ||||||||||||
Net income | $ | 21,375 | $ | 5,780 | $ | 33,383 | $ | 20,783 | ||||||||
Basic and diluted net income per unit | $ | 0.50 | $ | 0.14 | $ | 0.78 | $ | 0.49 | ||||||||
Equity in Earnings of NuStar Energy L.P.: | ||||||||||||||||
General partner interest | $ | 1,536 | $ | 167 | $ | 2,185 | $ | 1,181 | ||||||||
General partner incentive distribution | 6,929 | 5,718 | 13,858 | 10,906 | ||||||||||||
General partner’s interest in earnings of NuStar Energy L.P. | 8,465 | 5,885 | 16,043 | 12,087 | ||||||||||||
Limited partner interest in earnings of NuStar Energy L.P. | 14,152 | 1,540 | 20,128 | 11,813 | ||||||||||||
Amortization of step-up in basis related to NuStar Energy L.P.’s assets and liabilities | (721 | ) | (721 | ) | (1,442 | ) | (1,442 | ) | ||||||||
Equity in earnings of NuStar Energy L.P. | $ | 21,896 | $ | 6,704 | $ | 34,729 | $ | 22,458 | ||||||||
Distributable Cash Flow (Note 1): | ||||||||||||||||
Cash distributions from NuStar Energy L.P. associated with: | ||||||||||||||||
General partner interest | $ | 1,318 | $ | 1,211 | $ | 2,636 | $ | 2,422 | ||||||||
Incentive distribution rights (Note 2): | 6,929 | 5,718 | 13,858 | 11,436 | ||||||||||||
Limited partner interest-common units | 10,827 | 10,064 | 21,657 | 20,131 | ||||||||||||
Total cash distributions from NuStar Energy L.P. | 19,074 | 16,993 | 38,151 | 33,989 | ||||||||||||
Deduct expenses of NuStar GP Holdings, LLC: | ||||||||||||||||
General and administrative expenses | (720 | ) | (824 | ) | (1,477 | ) | (1,566 | ) | ||||||||
Income tax benefit | 200 | 49 | 183 | 69 | ||||||||||||
Interest expense, net | (22 | ) | (67 | ) | (49 | ) | (96 | ) | ||||||||
Distributable cash flow | $ | 18,532 | $ | 16,151 | $ | 36,808 | $ | 32,396 | ||||||||
Common units outstanding at record date | 42,503,784 | 42,500,990 | 42,503,784 | 42,500,990 | ||||||||||||
Distributable cash flow per unit | $ | 0.44 | $ | 0.38 | $ | 0.87 | $ | 0.76 | ||||||||
Cash distributions to be paid to the unitholders of NuStar GP Holdings, LLC: | ||||||||||||||||
Distribution per unit | $ | 0.43 | $ | 0.36 | $ | 0.86 | $ | 0.72 | ||||||||
Total distribution | $ | 18,277 | $ | 15,300 | $ | 36,554 | $ | 30,600 | ||||||||
NuStar GP Holdings, LLC
Consolidated Financial Information
(Unaudited, Thousands of Dollars)
Notes:
| 1. | NuStar GP Holdings, LLC utilizes distributable cash flow as a financial measure, which is not defined in United States generally accepted accounting principles. Management uses this financial measure because it is a widely accepted financial indicator used by investors to compare general partner performance. In addition, management believes that this measure provides investors an enhanced perspective of the ability to make a minimum quarterly distribution. Distributable cash flow is not intended to represent cash flows for the period, nor is it presented as an alternative to net income. It should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with United States generally accepted accounting principles. |
The following is a reconciliation of net income to distributable cash flow and net cash provided by operating activities:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Net Income | $ | 21,375 | $ | 5,780 | $ | 33,383 | $ | 20,783 | ||||||||
Less equity in earnings of NuStar Energy L.P. | (21,896 | ) | (6,704 | ) | (34,729 | ) | (22,458 | ) | ||||||||
Plus cash distributions from NuStar Energy L.P. | 19,074 | 16,993 | 38,151 | 33,989 | ||||||||||||
Other (income) expense, net | (21 | ) | 82 | 3 | 82 | |||||||||||
Distributable cash flow | 18,532 | 16,151 | 36,808 | 32,396 | ||||||||||||
Less cash distributions from NuStar Energy L.P. | (19,074 | ) | (16,993 | ) | (38,151 | ) | (33,989 | ) | ||||||||
Plus distributions of equity in earnings of NuStar Energy L.P. | 21,896 | 6,704 | 34,729 | 22,458 | ||||||||||||
Net effect of changes in operating accounts | 6,361 | 339 | 8,440 | (510 | ) | |||||||||||
Net cash provided by operating activities | $ | 27,715 | $ | 6,201 | $ | 41,826 | $ | 20,355 | ||||||||
| 2. | For the first quarter of 2008, NuStar Energy’s net income allocation to general and limited partners reflected total cash distributions based on the partnership interests outstanding as of March 31, 2008. NuStar Energy issued approximately 5.1 million common units in April 2008. Actual distribution payments are made within 45 days after the end of each quarter as of a record date that is set after the end of each quarter. As such, our portion of the actual distributions made with respect to the six months ended June 30, 2008, including the IDR, exceeded the net income allocation to us. |