NavSight (NSH) 10-Q 9 May 17 2017 Q1 Quarterly report Financial data

DEI Document

DEI Document - shares	3 Months Ended
	Mar. 31, 2017	Apr. 30, 2017
Document Information [Abstract]
Entity Registrant Name	NuStar GP Holdings, LLC
Entity Central Index Key	1,223,786
Trading Symbol	NSH
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Limited Liability Company, Units Outstanding		42,951,749

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 588	$ 207
Income tax receivable	303	303
Prepaid expenses and other current assets	290	292
Total current assets	1,181	802
Investment in NuStar Energy L.P.	263,337	268,742
Deferred income tax assets, net	5,086	5,086
Total assets	269,604	274,630
Current liabilities:
Short-term debt	31,000	30,000
Payable to related party	80	317
Accounts payable	173	1
Accrued liabilities	259	460
Taxes other than income tax	8	64
Total current liabilities	31,520	30,842
Commitments and contingencies (Note 8)
Members’ equity (42,951,749 common units outstanding as of March 31, 2017 and December 31, 2016)	251,398	257,662
Accumulated other comprehensive loss	(13,314)	(13,874)
Total members’ equity	238,084	243,788
Total liabilities and members’ equity	$ 269,604	$ 274,630
Common units outstanding	42,951,749	42,951,749

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Equity in earnings of NuStar Energy L.P.	$ 18,112	$ 17,015
General and administrative expenses:
Third parties	(587)	(749)
Related party	(241)	(83)
Total general and administrative expenses	(828)	(832)
Other income, net	0	613
Interest expense, net	(292)	(246)
Income before income tax benefit	16,992	16,550
Income tax benefit	0	126
Net income	$ 16,992	$ 16,676
Net income per unit	$ 0.39	$ 0.39
Weighted-average number of common units outstanding	42,951,749	42,930,549
Comprehensive income	$ 17,552	$ 9,958

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows from Operating Activities:
Net income	$ 16,992	$ 16,676
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of NuStar Energy L.P.	(18,112)	(17,015)
Distributions of equity in earnings from NuStar Energy L.P.	18,112	17,015
Gain on sale of NuStar Energy L.P. common limited partner units in connection with unit-based compensation	0	(613)
Unit-based compensation expense	203	114
Amortization of deferred debt costs	42	42
Benefit for deferred income tax	0	(128)
Changes in current assets and liabilities (Note 6)	(362)	(1,991)
Increase in long-term receivable from related party	0	(900)
Increase in long-term liabilities	0	1,183
Net cash provided by operating activities	16,875	14,383
Cash Flows from Investing Activities:
Distributions in excess of equity in earnings from NuStar Energy L.P.	5,965	6,937
Investment in NuStar Energy L.P.	0	(160)
Proceeds from sale of NuStar Energy L.P. common units in connection with unit-based compensation	0	1,319
Net cash provided by investing activities	5,965	8,096
Cash Flows from Financing Activities:
Proceeds from short-term debt borrowings	1,000	4,000
Distributions to unitholders	(23,408)	(23,397)
Other, net	(51)	0
Net cash used in financing activities	(22,459)	(19,397)
Net increase in cash and cash equivalents	381	3,082
Cash and cash equivalents as of the beginning of the period	207	34
Cash and cash equivalents as of the end of the period	$ 588	$ 3,116

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BASIS OF PRESENTATION	ORGANIZATION AND BASIS OF PRESENTATION Organization NuStar GP Holdings, LLC (NuStar GP Holdings) (NYSE: NSH) is a publicly held Delaware limited liability company. Unless otherwise indicated, the terms “NuStar GP Holdings,” “NSH,” “we,” “our” and “us” are used in this report to refer to NuStar GP Holdings, LLC, to one or more of our consolidated subsidiaries or to all of them taken as a whole. Our unitholders have no liability under our limited liability company agreement, or for any of our debts, obligations or liabilities, in their capacity as unitholders. We have no operations or sources of income or cash flows other than our investment in NuStar Energy L.P. (NuStar Energy or NS) (NYSE: NS). As of March 31, 2017 , we have an approximate 15% ownership in NuStar Energy, consisting of the following: • the general partner interest; • 100% of the incentive distribution rights issued by NuStar Energy, which entitle us to receive increasing percentages of the cash distributed by NuStar Energy, currently at the maximum percentage of 23% ; and • 10,214,626 common units of NuStar Energy. NuStar Energy is a publicly held Delaware limited partnership engaged in the transportation of petroleum products and anhydrous ammonia, the terminalling and storage of petroleum products and the marketing of petroleum products. NuStar Energy has terminal and storage facilities in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, and the United Kingdom. NuStar Energy conducts its operations through its subsidiaries, primarily NuStar Logistics, L.P. (NuStar Logistics) and NuStar Pipeline Operating Partnership L.P. Recent Developments Navigator Acquisition and Financing Transactions. On May 4, 2017, NuStar Energy completed the acquisition of Navigator Energy Services, LLC for approximately $1.475 billion (the Navigator Acquisition), subject to customary adjustments at and following closing. In order to fund the purchase price, NuStar Energy issued 14,375,000 common units for net proceeds of $657.5 million , NuStar Logistics issued $550.0 million of 5.625% senior notes for net proceeds of $543.8 million and NuStar Energy issued 15,400,000 of its 7.625% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (Series B Preferred Units) for net proceeds of $372.2 million . In conjunction with the Navigator Acquisition, we amended and restated NuStar Energy’s partnership agreement to, among other things, provide a waiver of certain quarterly distributions with respect to our incentive distribution rights. In April 2017, we borrowed approximately $14.0 million under our revolving credit facility to fund a contribution to NuStar Energy in order to maintain our 2% general partner interest in connection with NuStar Energy’s issuance of common units. Please refer to Note 10 for a discussion of these transactions. Basis of Presentation These unaudited condensed consolidated financial statements include the accounts of NuStar GP Holdings and subsidiaries in which it has a controlling interest. Intercompany balances and transactions have been eliminated in consolidation. We account for our investment in NuStar Energy using the equity method. Therefore, our financial results reflect a portion of NuStar Energy’s net income based on our ownership interest in NuStar Energy. We have no separate operating activities apart from those conducted by NuStar Energy and therefore generate no revenues from operations. These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and all disclosures are adequate. All such adjustments are of a normal recurring nature unless disclosed otherwise. Financial information for the three months ended March 31, 2017 and 2016 included in these Condensed Notes to Consolidated Financial Statements is derived from our unaudited condensed consolidated financial statements. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . The consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements as of that date. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 . Certain previously reported amounts in the 2016 consolidated financial statements and condensed notes have been reclassified to conform to 2017 presentation. New Accounting Pronouncement Statement of Cash Flows . In August 2016, the Financial Accounting Standards Board issued amended guidance that clarifies how entities should present certain cash receipts and cash payments on the statement of cash flows, including but not limited to debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and distributions received from equity method investees. The changes are effective for annual and interim periods beginning after December 15, 2017, and amendments should be applied retrospectively. We will adopt these provisions January 1, 2018, and we do not expect the guidance to have a material impact on our statements of cash flows or disclosures.

INVESTMENT IN NUSTAR ENERGY

INVESTMENT IN NUSTAR ENERGY	3 Months Ended
	Mar. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
INVESTMENT IN NUSTAR ENERGY	INVESTMENT IN NUSTAR ENERGY Summary Financial Information Condensed consolidated financial information reported by NuStar Energy is presented below: March 31, December 31, (Thousands of Dollars) Balance Sheet Information: Current assets $ 253,666 $ 377,183 Property, plant and equipment, net 3,723,268 3,722,283 Goodwill 696,637 696,637 Other non-current assets 221,845 234,442 Total assets $ 4,895,416 $ 5,030,545 Current liabilities $ 254,492 $ 289,396 Long-term debt 2,951,980 3,014,364 Other non-current liabilities 118,601 115,168 Total liabilities 3,325,073 3,418,928 NuStar Energy partners’ equity 1,570,343 1,611,617 Total liabilities and partners’ equity $ 4,895,416 $ 5,030,545 Three Months Ended March 31, 2017 2016 (Thousands of Dollars) Statement of Comprehensive Income Information: Revenues $ 487,430 $ 405,703 Operating income $ 97,139 $ 94,565 Net income $ 57,940 $ 57,401 Other Our investment in NuStar Energy reconciles to NuStar Energy’s partners’ equity as follows: March 31, December 31, (Thousands of Dollars) NuStar Energy’s partners’ equity $ 1,570,343 $ 1,611,617 Less NuStar Energy’s preferred limited partners’ equity 218,307 218,400 NuStar Energy’s partners’ equity, excluding preferred limited partners’ equity 1,352,036 1,393,217 NuStar GP Holdings’ ownership interest in NuStar Energy 14.7 % 14.7 % NuStar GP Holdings’ share of NuStar Energy’s partners’ equity 198,749 204,803 Step-up in basis related to NuStar Energy’s assets and liabilities, including equity method goodwill, and other 64,588 63,939 Investment in NuStar Energy $ 263,337 $ 268,742 We do not own any NuStar Energy preferred limited partner units. Accordingly, we subtract NuStar Energy’s preferred limited partners’ equity from its total equity and apply our ownership percentage of NuStar Energy’s remaining equity when reconciling to our investment in NuStar Energy above.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS Employee Transfer from NuStar GP, LLC. On March 1, 2016, NuStar GP, LLC, our wholly owned subsidiary, transferred and assigned to NuStar Services Company LLC (NuStar Services Co), a wholly owned subsidiary of NuStar Energy, all of NuStar GP, LLC’s employees and related benefit plans, programs, contracts and policies (the Employee Transfer). Our officers, who are also officers of NuStar GP, LLC, are now dual employees of NuStar GP, LLC and NuStar Services Co. As a result of the Employee Transfer, NuStar Energy pays employee costs directly and sponsors the long-term incentive plan and other employee benefit plans. GP Services Agreement. Prior to the Employee Transfer, NuStar GP, LLC managed the operations of NuStar Energy under a services agreement effective January 1, 2008 pursuant to which employees of NuStar GP, LLC performed services for NuStar Energy’s U.S. operations. Employees of NuStar GP, LLC provided services to both NuStar Energy and NuStar GP Holdings; therefore, NuStar Energy reimbursed NuStar GP, LLC for all employee costs incurred prior to the Employee Transfer, other than the expenses allocated specifically to NuStar GP Holdings (the Holdco Administrative Services Expense). For the three months ended March 31, 2016 , NuStar Energy reimbursed NuStar GP, LLC $32.0 million for payroll, employee benefit plan and unit-based compensation expenses and $0.1 million related to other expenses. The Holdco Administrative Services Expense totaled $0.3 million for the three months ended March 31, 2016 . In conjunction with the Employee Transfer, NuStar GP, LLC entered into an Amended and Restated Services Agreement with NuStar Services Co, a wholly owned subsidiary of NuStar Energy, effective March 1, 2016 (the Amended GP Services Agreement). The Amended GP Services Agreement provides that NuStar Services Co will furnish administrative services necessary to conduct our business. We will compensate NuStar Services Co for these services through an annual fee of $1.0 million, subject to adjustment based on the annual merit increase percentage applicable to NuStar Services Co employees for the most recently completed fiscal year and for changes in level of service. The Amended GP Services Agreement will terminate on March 1, 2020 and will automatically renew for successive two-year terms, unless terminated by either party. We incurred administrative expenses related to the Amended GP Services Agreement of $0.2 million and $0.1 million for the three months ended March 31, 2017 and 2016 , respectively, which are reported in related party general and administrative expenses on the consolidated statements of comprehensive income. Balance Sheet Items. We had a payable to NuStar Energy of $0.1 million and $0.3 million as of March 31, 2017 and December 31, 2016 , respectively, mainly comprised of service fees and expenses paid on behalf of NuStar GP Holdings.

DISTRIBUTIONS FROM NUSTAR ENERG

DISTRIBUTIONS FROM NUSTAR ENERGY	3 Months Ended
	Mar. 31, 2017
DISTRIBUTIONS FROM NUSTAR ENERGY [Abstract]
DISTRIBUTIONS FROM NUSTAR ENERGY	DISTRIBUTIONS FROM NUSTAR ENERGY Beginning with the distribution earned for the second quarter of 2017, we will not receive incentive distributions with respect to certain NS common units, including those recently issued by NuStar Energy in connection with the Navigator Acquisition. Please refer to Note 10 for further discussion. The following table reflects the allocation of NuStar Energy’s cash distributions earned for the periods indicated among its general and common limited partners: Three Months Ended March 31, 2017 2016 (Thousands of Dollars, Except Per Unit Data) General partner interest $ 2,343 $ 1,961 General partner incentive distribution rights 12,912 10,805 Total general partner distribution 15,255 12,766 Common limited partner distribution 11,185 11,144 Total distributions to NuStar GP Holdings 26,440 23,910 Public common limited partners’ distribution 90,728 74,141 Total cash distributions $ 117,168 $ 98,051 Cash distributions per unit applicable to common limited partners $ 1.095 $ 1.095 The following table summarizes information related to NuStar Energy’s quarterly cash distributions to its general and common limited partners: Quarter Ended Cash Distributions Per Common Unit Total Cash Distributions Record Date Payment Date (Thousands of Dollars) March 31, 2017 (a) $ 1.095 $ 117,168 May 8, 2017 May 12, 2017 December 31, 2016 $ 1.095 $ 98,971 February 8, 2017 February 13, 2017 (a) The distribution was announced on April 24, 2017 .

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	FAIR VALUE MEASUREMENTS We segregate the inputs used in measuring fair value into three levels: Level 1, defined as observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists. We recognize cash equivalents, receivables, payables and short-term debt in our consolidated balance sheets at their carrying amounts. The fair values of these financial instruments approximate their carrying amounts. The fair value of our short-term debt would fall in Level 2 of the fair value hierarchy.

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS	3 Months Ended
	Mar. 31, 2017
Statement of Cash Flows [Abstract]
STATEMENTS OF CASH FLOWS	STATEMENTS OF CASH FLOWS Changes in current assets and current liabilities were as follows: Three Months Ended March 31, 2017 2016 (Thousands of Dollars) Decrease (increase) in current assets: Receivable from related party, net $ — $ 1,143 Other receivables — (32 ) Prepaid expenses and other current assets (40 ) 76 Increase (decrease) in current liabilities: Payable to related party (237 ) — Accounts payable 172 (220 ) Accrued compensation expense — (1,339 ) Accrued liabilities (201 ) (81 ) Taxes other than income tax (56 ) (1,538 ) Changes in current assets and current liabilities $ (362 ) $ (1,991 ) Cash flows related to interest were as follows: Three Months Ended March 31, 2017 2016 (Thousands of Dollars) Cash paid for interest $ 251 $ 200

CREDIT FACILITY

CREDIT FACILITY	3 Months Ended
	Mar. 31, 2017
Line of Credit Facility [Abstract]
CREDIT FACILITY	CREDIT FACILITY Our revolving credit facility dated June 28, 2013 currently has a borrowing capacity of up to $50.0 million , of which up to $10.0 million may be available for letters of credit. We amended this facility on June 16, 2016 to, among other things, extend its maturity to June 27, 2017. Our obligations under our revolving credit facility are guaranteed by Riverwalk Holdings, LLC (Riverwalk), our wholly owned subsidiary. Riverwalk has pledged a total of 2,107,918 NuStar Energy common units that it owns to secure its guarantee. Borrowings under our revolving credit facility are used to fund capital contributions to NuStar Energy to maintain our 2% general partner interest when NuStar Energy issues additional common units and to meet other liquidity and capital resource requirements. As of March 31, 2017 , we had outstanding borrowings of $31.0 million and availability of $19.0 million for borrowings under our revolving credit facility. Interest on our revolving credit facility is based upon, at our option, either an alternative base rate or a LIBOR-based rate. The weighted-average interest rates related to borrowings under our revolving credit facility as of March 31, 2017 and December 31, 2016 , were 3.0% and 2.8% , respectively. Our revolving credit facility requires that NuStar Energy’s consolidated debt coverage ratio (as defined in our revolving credit agreement) not exceed 5.50-to-1.00 as of March 31, 2017. We are also required to receive cash distributions each fiscal quarter of at least $16.0 million in respect of our ownership interests in NuStar Energy. Our management believes that we are in compliance with the covenants in the revolving credit facility as of March 31, 2017 .

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES We are not currently a party to any material legal proceedings and have not recorded any accruals for loss contingencies. NuStar Energy is a party to claims and legal proceedings arising in the ordinary course of its business, which it believes are not material to its financial position or results of operations. However, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on NuStar Energy’s results of operations and ability to pay distributions, which would impact our results of operations and ability to pay distributions.

MEMBERS' EQUITY

MEMBERS' EQUITY	3 Months Ended
	Mar. 31, 2017
Members' Equity [Abstract]
MEMBERS' EQUITY	MEMBERS’ EQUITY The following table presents changes to our members’ equity (in thousands of dollars): Balance as of January 1, 2017 $ 243,788 Net income 16,992 Distributions to unitholders (23,408 ) Share of NuStar Energy’s other comprehensive income 560 Unit-based compensation expense 152 Balance as of March 31, 2017 $ 238,084 Cash Distributions The following table summarizes our cash distributions applicable to the period in which the distributions were earned: Three Months Ended March 31, 2017 2016 (Thousands of Dollars, Except Per Unit Data) Cash distributions per unit $ 0.545 $ 0.545 Total cash distributions $ 23,409 $ 23,397 The following table summarizes information related to our quarterly cash distributions: Quarter Ended Cash Distributions Per Unit Total Cash Distributions Record Date Payment Date (Thousands of Dollars) March 31, 2017 (a) $ 0.545 $ 23,409 May 8, 2017 May 16, 2017 December 31, 2016 $ 0.545 $ 23,408 February 8, 2017 February 15, 2017 (a) The distribution was announced on April 24, 2017 .

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Navigator Acquisition On April 11, 2017, NuStar Logistics and NuStar Energy entered into a Membership Interest Purchase and Sale Agreement (the Acquisition Agreement) with FR Navigator Holdings LLC to acquire all of the issued and outstanding limited liability company interests in Navigator Energy Services, LLC (Navigator) for approximately $1.475 billion , subject to customary adjustments at and following closing. Navigator owns and operates crude oil transportation, pipeline gathering and storage assets located in the Midland Basin of West Texas consisting of: (i) more than 500 miles of crude oil gathering and transportation pipelines with approximately 92,000 barrels per day ship-or-pay volume commitments and deliverability of approximately 412,000 barrels per day; (ii) a pipeline gathering system with more than 200 connected producer tank batteries capable of more than 400,000 barrels per day of pumping capacity covering over 500,000 dedicated acres with fixed fee contracts; and (iii) approximately 1.0 million barrels of crude oil storage capacity with 440,000 barrels contracted to third parties. NuStar Energy closed on the Navigator Acquisition on May 4, 2017 and funded the purchase price with the net proceeds of the equity and debt issuances described below. The Navigator Acquisition broadens NuStar Energy’s geographic footprint by marking its entry into the Permian Basin and complements its existing asset base. NuStar Energy believes this acquisition provides a strong growth platform that, when coupled with its assets in the Eagle Ford region, solidifies its presence in two of the most prolific basins in the United States. We amended and restated NuStar Energy’s partnership agreement in connection with NuStar Energy’s issuance of the Series B Preferred Units described below and the Navigator Acquisition to waive up to an aggregate $22.0 million of the quarterly incentive distributions payable to us for any NS common units issued from the date of the Acquisition Agreement (other than those attributable to NS common units issued under any equity compensation plan) for ten consecutive quarters, starting with the second quarter of 2017. Issuance of Common Units On April 18, 2017, NuStar Energy issued 14,375,000 common units representing limited partner interests at a price of $46.35 per unit. NuStar Energy used the net proceeds from this offering of $657.5 million , including our contribution of $13.6 million to maintain our 2% general partner interest, to fund a portion of the purchase price for the Navigator Acquisition. Beginning with the distribution earned for the second quarter of 2017, we will not receive incentive distributions with respect to these common units. We borrowed approximately $14.0 million under our revolving credit facility to fund our general partner contribution to NuStar Energy, and our common limited partner ownership interest in NuStar Energy was approximately 11% subsequent to this issuance. Issuance of 5.625% Senior Notes On April 28, 2017, NuStar Logistics issued $550.0 million of 5.625% senior notes due April 28, 2027. NuStar Energy used the net proceeds of $543.8 million from the offering to fund a portion of the purchase price for the Navigator Acquisition and to pay related fees and expenses. Issuance of Series B Preferred Units On April 28, 2017 , NuStar Energy issued 15,400,000 of its Series B Preferred Units representing limited partner interests at a price of $25.00 per unit. NuStar Energy used the net proceeds of $372.2 million from the issuance of the Series B Preferred Units to fund a portion of the purchase price for the Navigator Acquisition and to pay related fees and expenses. Distributions on the Series B Preferred Units are payable out of any legally available funds, accrue and are cumulative from the date of original issuance of the Series B Preferred Units and are payable on the 15 th day of each of March, June, September and December of each year (beginning on September 15, 2017) to holders of record on the first day of each payment month. The initial distribution rate on the Series B Preferred Units to, but not including, June 15, 2022 is 7.625% per annum of the $25.00 liquidation preference per unit (equal to $1.90625 per unit per annum). On and after June 15, 2022, distributions on the Series B Preferred Units accumulate at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 5.643% . The Series B Preferred Units rank senior to NuStar Energy’s common units with respect to distribution rights and rights upon liquidation.

INVESTMENT IN NUSTAR ENERGY (Ta

INVESTMENT IN NUSTAR ENERGY (Tables)	3 Months Ended
	Mar. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
NuStar Energy's Balance Sheet Information	Condensed consolidated financial information reported by NuStar Energy is presented below: March 31, December 31, (Thousands of Dollars) Balance Sheet Information: Current assets $ 253,666 $ 377,183 Property, plant and equipment, net 3,723,268 3,722,283 Goodwill 696,637 696,637 Other non-current assets 221,845 234,442 Total assets $ 4,895,416 $ 5,030,545 Current liabilities $ 254,492 $ 289,396 Long-term debt 2,951,980 3,014,364 Other non-current liabilities 118,601 115,168 Total liabilities 3,325,073 3,418,928 NuStar Energy partners’ equity 1,570,343 1,611,617 Total liabilities and partners’ equity $ 4,895,416 $ 5,030,545
NuStar Energy's Statement of Comprehensive Income Information	Condensed consolidated financial information reported by NuStar Energy is presented below: Three Months Ended March 31, 2017 2016 (Thousands of Dollars) Statement of Comprehensive Income Information: Revenues $ 487,430 $ 405,703 Operating income $ 97,139 $ 94,565 Net income $ 57,940 $ 57,401
Reconciliation of NuStar Energy’s total partners’ equity to our investment in NuStar Energy	Our investment in NuStar Energy reconciles to NuStar Energy’s partners’ equity as follows: March 31, December 31, (Thousands of Dollars) NuStar Energy’s partners’ equity $ 1,570,343 $ 1,611,617 Less NuStar Energy’s preferred limited partners’ equity 218,307 218,400 NuStar Energy’s partners’ equity, excluding preferred limited partners’ equity 1,352,036 1,393,217 NuStar GP Holdings’ ownership interest in NuStar Energy 14.7 % 14.7 % NuStar GP Holdings’ share of NuStar Energy’s partners’ equity 198,749 204,803 Step-up in basis related to NuStar Energy’s assets and liabilities, including equity method goodwill, and other 64,588 63,939 Investment in NuStar Energy $ 263,337 $ 268,742 We do not own any NuStar Energy preferred limited partner units. Accordingly, we subtract NuStar Energy’s preferred limited partners’ equity from its total equity and apply our ownership percentage of NuStar Energy’s remaining equity when reconciling to our investment in NuStar Energy above.

DISTRIBUTIONS FROM NUSTAR ENE16

DISTRIBUTIONS FROM NUSTAR ENERGY (Tables) - NuStar Energy [Member]	3 Months Ended
	Mar. 31, 2017
Schedule of Equity Method Investments [Line Items]
Distributions to General and Common Limited Partners	The following table reflects the allocation of NuStar Energy’s cash distributions earned for the periods indicated among its general and common limited partners: Three Months Ended March 31, 2017 2016 (Thousands of Dollars, Except Per Unit Data) General partner interest $ 2,343 $ 1,961 General partner incentive distribution rights 12,912 10,805 Total general partner distribution 15,255 12,766 Common limited partner distribution 11,185 11,144 Total distributions to NuStar GP Holdings 26,440 23,910 Public common limited partners’ distribution 90,728 74,141 Total cash distributions $ 117,168 $ 98,051 Cash distributions per unit applicable to common limited partners $ 1.095 $ 1.095
Distributions to General and Common Limited Partners, by Distribution	The following table summarizes information related to NuStar Energy’s quarterly cash distributions to its general and common limited partners: Quarter Ended Cash Distributions Per Common Unit Total Cash Distributions Record Date Payment Date (Thousands of Dollars) March 31, 2017 (a) $ 1.095 $ 117,168 May 8, 2017 May 12, 2017 December 31, 2016 $ 1.095 $ 98,971 February 8, 2017 February 13, 2017 (a) The distribution was announced on April 24, 2017 .

STATEMENTS OF CASH FLOWS (Table

STATEMENTS OF CASH FLOWS (Tables)	3 Months Ended
	Mar. 31, 2017
Statement of Cash Flows [Abstract]
Changes in current assets and liabilities	Changes in current assets and current liabilities were as follows: Three Months Ended March 31, 2017 2016 (Thousands of Dollars) Decrease (increase) in current assets: Receivable from related party, net $ — $ 1,143 Other receivables — (32 ) Prepaid expenses and other current assets (40 ) 76 Increase (decrease) in current liabilities: Payable to related party (237 ) — Accounts payable 172 (220 ) Accrued compensation expense — (1,339 ) Accrued liabilities (201 ) (81 ) Taxes other than income tax (56 ) (1,538 ) Changes in current assets and current liabilities $ (362 ) $ (1,991 )
Cash flows related to interest and income tax	Cash flows related to interest were as follows: Three Months Ended March 31, 2017 2016 (Thousands of Dollars) Cash paid for interest $ 251 $ 200

MEMBERS' EQUITY (Tables)

MEMBERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2017
Members' Equity [Abstract]
Changes in Members’ Equity	The following table presents changes to our members’ equity (in thousands of dollars): Balance as of January 1, 2017 $ 243,788 Net income 16,992 Distributions to unitholders (23,408 ) Share of NuStar Energy’s other comprehensive income 560 Unit-based compensation expense 152 Balance as of March 31, 2017 $ 238,084
Cash Distributions	The following table summarizes our cash distributions applicable to the period in which the distributions were earned: Three Months Ended March 31, 2017 2016 (Thousands of Dollars, Except Per Unit Data) Cash distributions per unit $ 0.545 $ 0.545 Total cash distributions $ 23,409 $ 23,397
Distributions Made to Limited Liability Company (LLC) Member, by Distribution	The following table summarizes information related to our quarterly cash distributions: Quarter Ended Cash Distributions Per Unit Total Cash Distributions Record Date Payment Date (Thousands of Dollars) March 31, 2017 (a) $ 0.545 $ 23,409 May 8, 2017 May 16, 2017 December 31, 2016 $ 0.545 $ 23,408 February 8, 2017 February 15, 2017 (a) The distribution was announced on April 24, 2017 .

ORGANIZATION AND BASIS OF PRE19

ORGANIZATION AND BASIS OF PRESENTATION Narrative 1 (Details)	3 Months Ended
	Mar. 31, 2017shares
Schedule of Equity Method Investments [Line Items]
Percent ownership in NuStar Energy	15.00%
General partner interest percentage	2.00%
Percent of incentive distribution rights issued by NuStar Energy	100.00%
Maximum percentage of cash distributed by NuStar Energy	23.00%
Common units of NuStar Energy	10,214,626

ORGANIZATION AND BASIS OF PRE20

ORGANIZATION AND BASIS OF PRESENTATION Narrative 2 (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Mar. 31, 2016	May 04, 2017
Equity Method Investee [Line Items]
General partner interest percentage			2.00%
Proceeds from short-term debt borrowings			$ 1,000	$ 4,000
Subsequent Event [Member] | NuStar Energy Common Unit Issuance [Member]
Equity Method Investee [Line Items]
Limited partner units issued by NuStar Energy		14,375,000
Net proceeds received by NuStar Energy from issuance of units		$ 657,500
Subsequent Event [Member] | NuStar Energy Series B Preferred Unit Issuance [Member]
Equity Method Investee [Line Items]
Limited partner units issued by NuStar Energy		15,400,000
Net proceeds received by NuStar Energy from issuance of units		$ 372,200
NuStar Energy's preferred units distribution rate		7.625%
Subsequent Event [Member] | NuStar Energy Logistics Notes Due 2027 [Member]
Equity Method Investee [Line Items]
NuStar Energy's senior note issuance		$ 550,000
NuStar Energy's senior notes interest rate		5.625%
NuStar Energy's net proceeds from senior note issuance		$ 543,800
Subsequent Event [Member] | Revolving Credit Facility [Member]
Equity Method Investee [Line Items]
Proceeds from short-term debt borrowings	$ 14,000	$ 14,000
Navigator Acquisition [Member] | Subsequent Event [Member]
Equity Method Investee [Line Items]
NuStar Energy's purchase price of acquired entity					$ 1,475,000

INVESTMENT IN NUSTAR ENERGY Tab

INVESTMENT IN NUSTAR ENERGY Table 1 (Details) - NuStar Energy [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Equity Method Investment, Summarized Financial Information, Assets [Abstract]
Current assets	$ 253,666	$ 377,183
Property, plant and equipment, net	3,723,268	3,722,283
Goodwill	696,637	696,637
Other non-current assets	221,845	234,442
Total assets	4,895,416	5,030,545
Equity Method Investment, Summarized Financial Information, Liabilities and Equity [Abstract]
Current liabilities	254,492	289,396
Long-term debt	2,951,980	3,014,364
Other non-current liabilities	118,601	115,168
Total liabilities	3,325,073	3,418,928
NuStar Energy partners' equity	1,570,343	1,611,617
Total liabilities and partners’ equity	$ 4,895,416	$ 5,030,545

INVESTMENT IN NUSTAR ENERGY T22

INVESTMENT IN NUSTAR ENERGY Table 2 (Details) - NuStar Energy [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income Information:
Revenues	$ 487,430	$ 405,703
Operating income	97,139	94,565
Net income	$ 57,940	$ 57,401

INVESTMENT IN NUSTAR ENERGY T23

INVESTMENT IN NUSTAR ENERGY Table 3 (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Reconcilliation of NuStar Energy’s total partners’ equity to our investment in NuStar Energy
NuStar GP Holdings’ ownership interest in NuStar Energy	15.00%
NuStar GP Holdings’ share of NuStar Energy’s partners’ equity	$ 198,749	$ 204,803
Step-up in basis related to NuStar Energy’s assets and liabilities, including equity method goodwill, and other	64,588	63,939
Investment in NuStar Energy	263,337	268,742
NuStar Energy [Member]
Reconcilliation of NuStar Energy’s total partners’ equity to our investment in NuStar Energy
NuStar Energy’s partners’ equity	1,570,343	1,611,617
Less NuStar Energy’s preferred limited partners’ equity	218,307	218,400
NuStar Energy’s partners’ equity, excluding preferred limited partners’ equity	$ 1,352,036	$ 1,393,217
NuStar GP Holdings’ ownership interest in NuStar Energy	14.70%	14.70%

RELATED PARTY TRANSACTIONS Narr

RELATED PARTY TRANSACTIONS Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Related Party Transactions [Abstract]
Expenses for payroll, employee benefit plans and unit-based compensation		$ 32,000
Other expenses		100
Holdco Administrative Services Expense		300
Amended GP Services Agreement, Description	The Amended GP Services Agreement provides that NuStar Services Co will furnish administrative services necessary to conduct our business. We will compensate NuStar Services Co for these services through an annual fee of $1.0 million, subject to adjustment based on the annual merit increase percentage applicable to NuStar Services Co employees for the most recently completed fiscal year and for changes in level of service. The Amended GP Services Agreement will terminate on March 1, 2020 and will automatically renew for successive two-year terms, unless terminated by either party.
Amended GP Services Agreement Services Expense	$ 241	$ 83
Payable to related party	$ 80		$ 317

DISTRIBUTIONS FROM NUSTAR ENE25

DISTRIBUTIONS FROM NUSTAR ENERGY Table 1 (Details) - NuStar Energy [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
The allocation of NuStar Energy’s cash distributions earned for the periods indicated among its general and limited partners
General partner interest	$ 2,343		$ 1,961
General partner incentive distribution rights	12,912		10,805
Total general partner distribution	15,255		12,766
Common limited partner distribution	11,185		11,144
Total distributions to NuStar GP Holdings	26,440		23,910
Public common limited partners’ distribution	90,728		74,141
Total cash distributions	$ 117,168	$ 98,971	$ 98,051
Cash distributions per unit applicable to common limited partners	$ 1.095	$ 1.095	$ 1.095

DISTRIBUTIONS FROM NUSTAR ENE26

DISTRIBUTIONS FROM NUSTAR ENERGY Table 2 (Details) - NuStar Energy [Member] - USD ($) $ / shares in Units, $ in Thousands	Apr. 24, 2017	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Distributions from NuStar Energy (dates and totals)
NuStar Energy's cash distributions per unit applicable to limited partners (distribution earned)		$ 1.095	$ 1.095	$ 1.095
NuStar Energy's total cash distributions (distribution earned)		$ 117,168	$ 98,971	$ 98,051
NuStar Energy's distribution date of record (distribution earned)		May 8, 2017	Feb. 8, 2017
NuStar Energy's distribution payment date (distribution earned)		May 12, 2017	Feb. 13, 2017
Subsequent Event [Member]
Distributions from NuStar Energy (dates and totals)
NuStar Energy's distribution announcement date (distribution earned)	Apr. 24, 2017

STATEMENTS OF CASH FLOWS Table

STATEMENTS OF CASH FLOWS Table 1 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Decrease (increase) in current assets:
Receivable from related party, net	$ 0	$ 1,143
Other receivables	0	(32)
Prepaid expenses and other current assets	(40)	76
Increase (decrease) in current liabilities:
Payable to related party	(237)	0
Accounts payable	172	(220)
Accrued compensation expense	0	(1,339)
Accrued liabilities	(201)	(81)
Taxes other than income tax	(56)	(1,538)
Changes in current assets and current liabilities	$ (362)	$ (1,991)

STATEMENTS OF CASH FLOWS Tabl28

STATEMENTS OF CASH FLOWS Table 2 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows related to interest and income tax
Cash paid for interest	$ 251	$ 200

CREDIT FACILITY Narrative (Deta

CREDIT FACILITY Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Line of Credit Facility [Line Items]
General partner interest percentage	2.00%
Outstanding borrowings	$ 31,000,000	$ 30,000,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Borrowing capacity	50,000,000
Letters of credit capacity	$ 10,000,000
Collateral	Our obligations under our revolving credit facility are guaranteed by Riverwalk Holdings, LLC (Riverwalk), our wholly owned subsidiary. Riverwalk has pledged a total of 2,107,918 NuStar Energy common units that it owns to secure its guarantee.
Outstanding borrowings	$ 31,000,000
Borrowing availability	$ 19,000,000
Weighted-average interest rate	3.00%	2.80%
Revolving Credit Facility [Member] | NuStar Energy's Consolidated Debt Coverage Ratio [Member]
Line of Credit Facility [Line Items]
Covenant terms	Our revolving credit facility requires that NuStar Energy’s consolidated debt coverage ratio (as defined in our revolving credit agreement) not exceed 5.50-to-1.00 as of March 31, 2017.
Revolving Credit Facility [Member] | Cash Distributions Covenant [Member]
Line of Credit Facility [Line Items]
Covenant terms	We are also required to receive cash distributions each fiscal quarter of at least $16.0 million in respect of our ownership interests in NuStar Energy.

MEMBERS' EQUITY Table 1 (Detail

MEMBERS' EQUITY Table 1 (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Changes in Members' Equity [Roll Forward]
Balance as of January 1, 2017	$ 243,788
Net income	16,992	$ 16,676
Distributions to unitholders	(23,408)	$ (23,397)
Share of NuStar Energy’s other comprehensive income	560
Unit-based compensation expense	152
Balance as of March 31, 2017	$ 238,084

MEMBERS' EQUITY Table 2 (Detail

MEMBERS' EQUITY Table 2 (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Our cash distributions applicable to the period in which the distributions were earned
Cash distributions per unit	$ 0.545	$ 0.545	$ 0.545
Total cash distributions	$ 23,409	$ 23,408	$ 23,397

MEMBERS' EQUITY Table 3 (Detail

MEMBERS' EQUITY Table 3 (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 24, 2017	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Cash distributions per unit applicable to members (distribution earned)		$ 0.545	$ 0.545	$ 0.545
Total cash distributions (distribution earned)		$ 23,409	$ 23,408	$ 23,397
Distribution date of record (distribution earned)		May 8, 2017	Feb. 8, 2017
Distribution payment date (distribution earned)		May 16, 2017	Feb. 15, 2017
Subsequent Event [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distribution announcement date (distribution earned)	Apr. 24, 2017

SUBSEQUENT EVENTS Narrative 1 (

SUBSEQUENT EVENTS Narrative 1 (Details) - Subsequent Event [Member]	May 04, 2017USD ($)	Jun. 30, 2017USD ($)
Subsequent Event [Line Items]
Incentive distribution waiver		$ 22,000,000
Number of periods under incentive distribution waiver		10
Navigator Acquisition [Member]
Subsequent Event [Line Items]
NuStar Energy's purchase price of acquired entity	$ 1,475,000,000
Description of NuStar Energy's Navigator Acquisition	Navigator owns and operates crude oil transportation, pipeline gathering and storage assets located in the Midland Basin of West Texas consisting of: (i) more than 500 miles of crude oil gathering and transportation pipelines with approximately 92,000 barrels per day ship-or-pay volume commitments and deliverability of approximately 412,000 barrels per day; (ii) a pipeline gathering system with more than 200 connected producer tank batteries capable of more than 400,000 barrels per day of pumping capacity covering over 500,000 dedicated acres with fixed fee contracts; and (iii) approximately 1.0 million barrels of crude oil storage capacity with 440,000 barrels contracted to third parties.

SUBSEQUENT EVENTS Narrative 2 (

SUBSEQUENT EVENTS Narrative 2 (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Mar. 31, 2016	Apr. 18, 2017
Subsequent Event [Line Items]
General partner interest percentage			2.00%
Proceeds from short-term debt borrowings			$ 1,000	$ 4,000
Contribution to NuStar Energy to maintain general partner interest			$ 0	$ 160
Subsequent Event [Member]
Subsequent Event [Line Items]
Common limited partner ownership interest in NuStar Energy		11.00%
NuStar Energy Common Unit Issuance [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Limited partner units issued by NuStar Energy		14,375,000
Price of common units issued by NuStar Energy, per unit					$ 46.35
Net proceeds received by NuStar Energy from issuance of units		$ 657,500
Contribution to NuStar Energy to maintain general partner interest		13,600
Revolving Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Proceeds from short-term debt borrowings	$ 14,000	$ 14,000

SUBSEQUENT EVENTS Narrative 3 (

SUBSEQUENT EVENTS Narrative 3 (Details) - NuStar Energy Logistics Notes Due 2027 [Member] - Subsequent Event [Member] $ in Millions	3 Months Ended
	Jun. 30, 2017USD ($)
Subsequent Event [Line Items]
NuStar Energy's senior notes interest rate	5.625%
NuStar Energy's senior note issuance	$ 550
NuStar Energy's net proceeds from senior note issuance	$ 543.8

SUBSEQUENT EVENTS Narrative 4 (

SUBSEQUENT EVENTS Narrative 4 (Details) - NuStar Energy Series B Preferred Unit Issuance [Member] - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jun. 30, 2017	Apr. 28, 2017
Subsequent Event [Line Items]
Limited partner units issued by NuStar Energy	15,400,000
Price of preferred units issued by NuStar Energy, per unit		$ 25
Net proceeds received by NuStar Energy from issuance of units	$ 372.2
NuStar Energy's preferred units distribution rate	7.625%
Liquidation preference of NuStar Energy's preferred units	$ 25
Minimum per unit quarterly distribution of NuStar Energy's preferred units, annualized	$ 1.90625
Description of floating dividend rate of NuStar Energy's preferred units	three-month LIBOR plus a spread of 5.643%