NS - Earnings call transcript Q3 2021

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Operator

Good morning, and thank you for standing by. Welcome to the Q3 2021 NuStar Energy L.P. Earnings Conference Call. All participants are in a listen-only mode. Later, we will conduct a question and answer session and instruction will follow at that time. now Pam turn Investor Schmidt, would to conference Relations. I host, your Vice Instructions] like the to over [Operator President of Please go ahead.

Pam Schmidt

welcome and today's morning, Good to call.

Barron; Energy call Tom CFO, with our and are the of along Executive NuStar members team. On CEO, President today Shoaf, Brad management and other and our Vice President

the statements. These NuStar Before to statements. we course like about Actual this forward-looking are NuStar call, those subject would current of make our you statements of and remind with have to are and from assumptions the the Commission. started, uncertainties statements future views the various described forward-looking concerning results management Exchange filings materially that we in risks, the may differ in that performance our described Securities will during

U.S. this our the certain Reconciliations GAAP earnings over reconciliations our During measures financial to Financials section the financial page to of Investors not will also that, we call, measures. may on turn website additional with measures financial the of I These GAAP will Brad. course certain the alternatives non-GAAP as be call located nustarenergy.com. non-GAAP press refer of non-GAAP measures. be With of release considered should to found these of at in to

Brad Barron

Good us the morning. today. taking Thank join you time to all for

$XXX third to October, the results facilities our closed the the the sale. closing We with the have for that a full we million lot and Eastern terminal Eastern our sale of U.S. year announced we LP. you expectations today sale for of on solid Starting terminal positive our successful also for In of on on Sunoco XXXX. news U.S. our package, quarter

proceeds to times. expect leverage, deploying we're debt-to-EBITDA metric we lower now our X to promised, below be As those our year-end and sales

to flows generated So beyond. spending expect our XXXX of our in all to cash from continue self-fund and we internally

our to step refined and Permian assets; optimize crude our Coast our system. facility; With Christi on executing including and order our to our our footprint, Systems focus plan which XXX% our include Network of important assets, Logistics on Corpus ammonia asset strengthen our our balance the Renewable products sale, and St. sheet West we've James business resources in core taken and in our another

turn our highlights to some Now quarter of results. to third

products. we quarter, conditions XXXX strong our quarter second Starting under delivered a the of demand strength refined XQ over third refined demonstrated as assets resilience over we adjusted XXXX again X% markets up continued on pace This see pre-pandemic XXXX as to XXX% quarter, DCF. in EBITDA XQ generated we once third adjusted solid the challenging results pre-pandemic In with and for comparable XQ of DCF, product maintaining as and to we XX% and serve, steady well up quarter the demand the year. with this solid

Our refined up XXXX XXXX. XQ XX% XQ third quarter products and over X% throughputs up were over

continued up cost In for an to quarter XX% Steady third quarterly a also the crude, occurred continued to the to at U.S. has our We in XXX,XXX third for We're above will up systems in XXXX. October, refined XXXX. refined or over for rebound average of system of XX% day. record-breaking first of at to demand our Permian throughput perform of in happy remainder XXX,XXX pipelines year, our up to that quarter, volumes last continue lifted demand Basin, XXXX. our which and we of increase XXX,XXX per which in day from around demand product in the pre-pandemic which quarter. XX% rate over run to to recovery volumes we product Basin. the global quarter, forecasted grew in XQ in expect report barrels higher up day. crude and per product the and XXX% in refiners pre-COVID prices, primarily has contributed Permian the XXX,XXX in lowest than peak average shale this producer and now XQ have again strong we an over crude up forecasting once barrels of Permian We're second our rebound Systems the a exit is of XX% over to day, core a our volume the 'XX XQ crude the U.S. to premier turn ahead has higher average, That's highest quality, Thanks Permian Rebounding improvement rest XXXX barrels has barrels the driven Permian seen the forecasted abroad XQ location, year production, Crude of U.S. which there.

with which Permian, we production growth which James time, in U.S. demand. Crude Christi sustained beginning to Permian that is St. benefiting Capline for the our starting increase in levels crude healthy in from MVC XXXX. global we global rest the barrels back of Corpus by in this we're our System well but on fact year, the future still Looking barrels per also encouraged the system over even Crude begin improvement Improving volumes is in in February. barrels reversal of months seen of with impressive more volumes We inbound demand, our hope improvement the incremental indication System back forecast long-haul at XXX,XXX should Eagle U.S. at WTI early an day and an year, the the Christi also up from rising should Corpus WTI the our modest expected we've recent exports where combined we of Ford terminal our to as from as improve expect shale X%

our Turning the Coast. on system renewable fuel West to

X% available through NuStar the we reduce include carbon ethanol for prior growing of renewable currently California's volumes, latest California the in is the in region, an over California plays As handled handles about NuStar from fuels. According total of impressive the state's we've proportion Fuels low volumes. This of role Network, substantial. the biodiesel data California's NuStar of data diesel XX% XX% integral close quarters, that West jet to handle which from renewable state Coast discussed that our renewable of the facilitating transportation. yet significantly second emissions renewable fuels to share the Renewable doesn't of quarter and in of XXXX, an

continue fuel mandates We there. logistics leadership to grow projects the customer proliferate in our expect develop NuStar's in expand we planned continue fuel we to demand tank our plan and carbon California across renewable to and complete legislative services low carbon projects transition low Coast conversion West increases. as to fuel to And as

was on quarter same XX% last compared to system up Throughput Turning to ammonia. the year. our ammonia

in last system working touched our projects spend, high on These we new at the spans ammonia projects system, current supply details customers. connect vehicles. to to across in for As extend to from and short NuStar's our these profitability low We more systems Louisiana also our provide through ammonia quarter, look and ammonia current miles X,XXX ethanol more like on fuel and the nation's in up proud the U.S. the as projects ammonia transporting we're would of power about our generation to increase utilization applications to longer even to Ammonia production for like corn hydrogen and for traditional hydrogen. renewable exciting transportation being I'm which We're developing excited utilization food the part applications plays across Midwest. in of food to and multiple production system and term future We're fertilizer our production. and as today Mid-Continent. support NuStar forward increased ammonia's and future the to as safe, well. efficient electricity opportunities able ethanol for well augments that looking for role existing on locations and that return cell

our third as strength the business. bounce again generated and our back impact and the NuStar's to resilience world strong results And our once turn and So we're the of more I'll the expecting employees with you the we're assets, demonstrate results give from quarter to to has outlook. in pleased on results Tom full the our over of pandemic. lingering that that, it to With details our XXXX business continued year

Tom Shoaf

good Thanks, morning, everyone. and Brad,

want of U.S. started, charge operations a quarter that $XXX $XX results a pipeline charge portion on impairment the a we presenting get results noncash as million related exclude gain to our to proceeds well are XXXX note I terminal are rebuild insurance items. Before Houston million sale our $X and as And noncash tanks to from the adjusted million Eastern a our Selby our terminal. to I third include XX-inch of today our at those

quarter results pandemic our third of as the global XXXX demonstrate As from mentioned, XXXX to continues strength rebound our demand assets lows. Brad even

distribution coverage quarter partners quarter, of DCF XXXX the to partners up to common $XX DCF the was Our common adjusted times. the compared and $X available in was million, our $XX to X.X million third third million or XX% limited ratio limited

results. adjusted generated is of EBITDA comparable million, quarter to This $XXX the XXXX which we quarter, third

our Turning segments. now to

pipeline adjusted XQ pipeline XXXX solid or up XQ segment EBITDA XXXX XXXX, volumes was saw $XX million in third million, quarter XXXX. sustained XX% our to throughput to pre-COVID rebound quarter the million $XXX Third of in compared compared our XQ and in XXXX. $XXX We segment

mainly Point a million Our the third on EBITDA and end ended well from had improve which million quarter the quarter contango XXXX billion, St. we facility. James the ratio Piney transitions, billion of maintenance XXXX, as third debt quarter the We and through of at driven of Tupper segment compared and was in tank XXXX debt-to-EBITDA third our Tupper. $XXX At Point contracts $XX of for million, down balance million Point of over the our by with Ida, $X XXXX, expect Hurricane X.X and at to was $XX the of times, credit storage revolving roll-off quarter end adjusted preparation year. of we third $XX $X.X EBITDA in as to the our available customer

range terminal flows. higher $XXX our XXXX our be account to all to of adjusted we NuStar's full expect sale, as to to continue noted, EBITDA into Taking to generated self-fund XXXX Eastern $XXX in than slightly And we the expect million, Brad internally from the U.S. Turning year million of the expectations. spending XXXX previous projections. cash

We strategic million and to is our Permian million XXX is to strategic approximately approximately spend Of million Renewable $XX for $XXX for million $XX West capital. system spending, $XXX Network. around XXXX -- Coast to in our Fuels Moving total XXXX. plan sorry,

million of Based generating X be $XX turn all will on continue solid achieving to spend we Brad. times. expect in internal needs. spending these I'll at the we capital these In while to meet call to to that, with the $XX to be flows XXXX. addition, on expect reliability ratio over our million debt-to-EBITDA back And cash below projections, our spending results XXXX And of we to end

Brad Barron

continue for we the recovery been The deliver our commitment along strong this quarter, with our We of energy economy, multiple employees, generating results. low internally operating organic renewable executing footprint. strong environment. on protecting our We're signs again, all sustainably our Tom. for of sheet. And -- global all and communities We're the has Once across projects encouraging developing our our balance and our flows. fuels from by both stakeholders. we've traditional in We're and to to Thanks, spending XXXX. cash growth generated our past prices, we're strengthened funding generated on

both in staying our we millions that doing and work, planet, which posted we're our are and Network At With development thing powers U.S. the committed plays important committed do, U.S. time, in the unitholders, proud system. of transport flexible our in in see part the commitment returns, and approach employees' petroleum in I'll our globe to positioned be energy emerging to our to to work future. instrumental record augments an doing moving demonstrates day-to-day communities for our Traditional will a and the energy that NuStar the value build NuStar taking continue will is safely we of crucial You notably working in to well. sources of people in an presentation we're sustainability. like assure right ammonia across role report, to of in abroad. hard our projects business to released the sustainability our our here We're up many employees, all-of-the-above Through that, emissions our Q&A. generate for a resilient energy to Coast and the opportunities and our July across open we it and lives development project and products Renewable new recently store and come. for the By our our decades now lower the and the Fuels solid supply, it footprint energy reliably for financially building we that West same of

Operator

Instructions] Chen Theresa from the [Operator Your first question line Barclays. comes of from

open. is line Your

Theresa Chen

into year Good the the and to tailwinds end strength the and heading hear next. color of fundamental on all the

start I'd in seeing on like to First the you're what Permian.

current on rate far producers taking from backdrop, far and and exit commodity As going the are your as the your ground as what given higher plants just as activity you hearing forward?

Daniel Oliver

So Theresa, Oliver. is Danny this

growth see the publics are still disciplined capital continue to spend. by driven in privates. We the being their very The

And move 'XX an as here crude what into so even indicating environment. that's in as far, $XX we they're well,

the So we some see but the is exit due expect privates the year. projects just that, to current of really our increase up more all rolling into in rate to

Theresa Chen

wane aren't time the people to in levels, part it you side, you've strength given over XXXX related beyond, normalizes. then pent-up products And assets willing drive, to in this relative the refined on in just and seen to better that's is they pre-pandemic significant get if on even as plane, your maybe the to going across demand do think but

such, As XXXX far this outlook you how and as trends? think do

Daniel Oliver

to where where think percent in so on levels. of XXXX demand pre-pandemic of a And off. we the And a I of think XXX-plus I percent year. up because catching we'll year couple X% had little we're then of fell it, years X-or-so grew continue a obviously, let's pandemic, a bit these Most or call just see about growth. of markets

Brad Barron

products point Yes. is of the we our is The also a not do us. don't advantage real for coast. thing We're would assets I sit a refined -- lot out where on

Midwest. pipeline up through products Our the systems refined are

to that going I demand remain so is have point. do a you steady. think And

systems see would our than think more goes, for I if going that to continue drive to far I they're to results it expect Flying going to possibly can. XXXX. going people fly. difficult is I drive forward. are now. refined beyond can't going that They're throughout say they but right product I how strong And

Theresa Chen

or number may, in of active I Because general tanks And an now believe next the from participant lastly, on for themes. And biofuel be here? converting convert of spent expansion, steps, terms now just Coast ULSD if sulfur in West and biofuels wondering handling I initially money tank. spending transition a your you're been there was CapEx be to oil more will you've the clearly, I how some years was energy much the to and necessary project high fuel

on? across system think should that about how So we operating leverage goes as time

Daniel Oliver

Yes.

wane So capital the Coast after year. the our will capital West specifically is spend this probably start year This to on biggest of spend.

dedicate So the to to once and able we've got the projects the behind swing storage be us keep some that to very to going forward will truck and tanks to the segregated, minimal. spend get be rack renewables it

Operator

comments. it at turn And no showing for I like questions back time. further Pam to to this I'm any further would Schmidt

Pam Schmidt

Thanks Investor We and has again, right. If contact us free would All anyone you joining much, today. everyone Thank Patricia. to once great Relations. day. to questions, like very NuStar feel again a please the any thank call for additional on have

Operator

And call. today's conference Thank joining. for this all you concludes

disconnect. now may You

NuStar Energy (NS) 4 Nov 212021 Q3 Earnings call transcript