Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the NuStar Energy Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Pam Schmidt, Vice President, Investor Relations.

begin. may You

Pam Schmidt

welcome and call. Good to morning today's

Business the CEO, Brad today Tom as and President other NuStar as our Danny President are and Chairman Shoaf; of Vice Executive team. L.P.'s members Energy our and Barron; well CFO, Engineering, Oliver, On and call Development management our of Vice Executive

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

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

that, With Brad. turn over call to will I the

Brad Barron

morning. for Good Thank joining all you, us today.

tell positive for XXXX outlook fourth I'm quarter XXXX, our as and you great to about our full-year and excited well solid performance as for beyond.

'XX, our fourth results. in history. fourth started EBITDA XX% in XXXX quarter than generated quarter, from highest get quarter million few fourth adjusted quarter higher highlights the the NuStar's of EBITDA fourth Let's of the with a in $XXX We total and adjusted

System. large period thanks in up XX% quarter by pipeline Crude of continued over in the the EBITDA in same Our to Permian performance strong fourth our segment the 'XX, part was

another of of the breaking year. in up Systems the a barrels-per-day, Permian hit volumes XXX,XXX last over same handing quarter, average quarter in Our fourth that's high record XX%

our a delivered is averaged in XXX,XXX volumes. MVCs systems of for System our higher once system X% South fourth refined quarter In Mid-Continent third solid, Christi which again 'XX. barrels-per-day fourth the that quarter contribution our throughputs dependable Our than and quarter, above product Corpus pleased Crude revenue the we're in that over Texas,

We're continued in our system, XXX,XXX average improvement the also encouraged on barrels-per-day by that saw rose month. January we volumes as last almost

fourth Our of $XX great EBITDA, fuels the segment $X over a quarter, million 'XX. marketing million had also up fourth quarter generating of

bumpy XXXX's about observations it and markets. across inflation few globe I XXXX ride around Tom. to and over a that, for financial made With historic turn the a before volatility

particularly Given results, strength the NuStar's that proud and business. which again, demonstrated economic I'm context, of XXXX of stability our once

marketing West was fuels growth systems. outperformance from indexation, impact of revenue our Renewables our growth the network, from System, refined steady, solid positive Permian and Coast XXXX revenue contribution up in the Crude Our in of our our the segment product

again spending adjusted and West and high-grade of higher Coast. EBITDA to generated spending revenue our our Permian on once by and in able we program, a impact which XXXX, for growth and the through of of historic to the full-year continuing capital including mitigate some expense footprint inflation, the self-fund our business, our We XXXX's optimization, were capital helped combination improvement

XXXX. able plan a head-start to the to get kicking careful to we which Through the of optimization and our were units, our about four debt-to-EBITDA And our to of Series-D able our course -- one-third planning keeping for simplify our while XXXX, year leverage, repurchase ratio us over were times we November, reduce capital positioned and meaningfully in structure. off under Preferred debt-to-EBITDA

or with industry original ahead again, in XXXX, which recordable is that outperformed stewardship And in I'm of NuStar good units whole. injury in the second as the as published about as two redeem TRIR better has our once now distinguished of pipeline Sustainability a our the was our responsibility to planning bulk times that safety throughout industry proud XXXX rate, We're twice about more the we culture total information and history. the NuStar schedule. our than 'XX, years Series-D industry also terms remaining Report, terminal XX which of provides and

call With Tom. that, over I'll turn the to

Tom Shoaf

Thanks, Brad morning, and everyone. good

Brad million EBITDA over adjusted mentioned, quarter As $XX XX% fourth XXXX. our up fourth was quarter or the

distribution XXXX quarter our $XX ratio adjusted DCF fourth Our X.XX coverage and was million times. was adjusted

segment $XXX quarter our XX% our as fourth of million, refined Brad results of or $XXX contributions performance a our $XX to system from segments. 'XX and EBITDA, EBITDA, our fourth products from pipelines Turning pipelines. Higher Pipeline earlier. largely of System of million generated described were 'XX, System In million the our McKee complemented by over up higher Permian strong from Crude Crude Permian our quarter

due our maintenance our tank next quarter about That the is St to James Terminal. quarter and transitions million, which lower Turning at Terminal of amendment Corpus $X fourth to was Storage $XX EBITDA customer was Christi and North at our Beach our and 'XX EBITDA. for required segment, customer fourth 'XX than contract an our decrease million extension

segment, grow, part up by million margins. Our West from West was in renewable stronger fourth partly Coast a region's our Coast large $XX 'XX, over XX% revenues our million, to Fuels driven quarter continued due for strategy, And EBITDA to 'XX. $X Marketing quarter fourth up

report over availability flexibility. continued debt-to-EBITDA At a our times. building to of our was and reducing of ratio facility's total capacity. in of fourth 'XX, million quarter debt on the 'XX the $X progress ended debt billion pleased billion We also with the end is our $XXX and strength X.XX I'm revolver balance financial quarter fourth our our $X.X and

XXXX. for outlook our to now Moving

XXXX. the full and $XXX expect we to range $XXX of to in $XXX to year, capital strategic million million, to million million EBITDA we For generate in plan on spend $XXX

plan allocate We about spend Fuels $XX $XX we to million to West and Permian our growing our System Renewable expect expand about Coast million to to network.

between spend in expect $XX to now million million we capital, and reliability on reliability $XX to Turning XXXX.

to over the And call I'll now turn Brad. back

Brad Barron

Thanks, Tom.

in than Optimizing maximizing was and was solid mentioned, first structure our to to XXXX facilitating free integral a improve cash systematically increase important spending, benefits will one-and-done results dollar cash with XXXX, reap business optimization last capital significantly in also step our changes our in been of XXXX flows continue more flow to but every NuStar's By our an and As that our I in scrutinizing to in able systematic year. effort. beyond. XXXX we've

to the well we this And projects organic in announce ammonia Renewables across Coast the System our cash our benefits, expect that by already and capital footprint, our year growth with in to increased path investing EBITDA Permian those later growth the on hope West from we we're on compounding projects as our networks, as flow system.

while to build business reliably we transport We optimize continue unit to the continue energy that essential and and to store financial strength fuels and lives. safely plan and holder our our value, our

year, and talking embark we to look the quarter. on you new future forward we this looks next to bright As

open With Q&A. the for that, we'll up call

Operator

Barclays. Instructions] [Operator Theresa Our first question from with comes Chen

Your is open. line

Theresa Chen

wide drive us what you my puts takes ask aspects the you for wanted of business low Good about could the given to guidance walk year, to morning. Thank the I and the question. end? the through just can taking for like versus versus help range, lower range higher your high of

Danny Oliver

rate last although see it's if same lower of forecasted, It's are than Oliver. the forecasted what Danny little kind but had than growth there. is more this a our bit in Theresa, we we story we growth Permian, 'XX, the active we We've year. could some Yes, saw have producers in some growth

pick volumes there, levels downside so but we Our Crude we the there's to really start -- Corpus at no we some MVC Christi little what see forecasted And and volumes, the anticipated. System, bit our could some see we stronger than could if have we've could upside seen we've then, up, West at a least in Biofuel on actually Coast System be which West January. on Coast

Brad Barron

segment. that forecasted would I fuels marketing our also say conservatively we

Danny Oliver

our record in margin the Yes, 'XX. businesses we based back reverted having after to a year norm for

Theresa Chen

it. elevated throughs that a it have somewhat positive read given maintenance Got and to a this as crude be system industry-wide. seems negative? for any your refining on turnarounds Does your year, or And customers either the

Danny Oliver

guidance, but are in always that some that's those forecasted all -- same We've the the system. got not across our obviously, turnarounds

that shipped going had McKee a refinery volumes, and, other when year refineries, in the have outage we they down, period but go pickup actually we cover a refineries feel refined heavy to other lines then on see this McKee, We and year. products where light more at some pretty the turnaround we it's into like pain, next and

significant So we're not any expecting impact.

Theresa Chen

Got just on D the down. Series and it, pay lastly,

front us premium with pay scheduled that a on that negotiated holder pay to for update you that? a the give had the XXXX, just does you down portion that to can you were in an premium impact of load the XXXX, believe XXXX, I So

Danny Oliver

XXXX, agreement, pay will we that's Theresa, likelihood, of premium be that'd in call par. XXX% the the all premium in premium in or the Yes, be stated which

Theresa Chen

you. Thank

Operator

for our moment One next question.

Moreen Mizuho. next Our from Gabriel question with comes

open. is line Your

Chris Jeffrey

Hi, everyone. congrats This on Jeffrey for on the quarter. Chris is Gabe,

Just $XX the the besides kind areas, for? million any spend curious about and balance million, strategic $XX that's the projects of marked particular

Danny Oliver

detail we're mentionable we in in later deals the spend comments -- execute on forecasting system money when some fully little are there. some about we spending further year, but is his able suppose ammonia discuss one be a hope in to mentioned that those, when I forecasting our we some Brad to we

just and number. we a of across out scattered that year, we singles our up systems we that's rest it projects have is doubles, projects, and The what say what of return smaller balance every the basket makes good of various call

Brad Barron

are Fuels then our But focused it's growth in mainly Permian. Renewable West the network Coast areas, and the which

Chris Jeffrey

how at And kind for that the thanks. into backdrop, impacted taking Great, all? that XXXX, the just blending of then, and account the margin of kind on curious quarter you're outlook

Danny Oliver

as we bought we store a fall, high summer Last months. in again, spreads the and in I up in business, the their then period in in at margin widest historically, that we the and high just that the make in that saw and butane and business. last butane historically lot winter the margins we summer, typically are We gasoline when a So transition we, blending year, and had it mean reminder, we the sell of the lock butane fall blend summer. margins just

margins to what But at least we consider still going going to be on back It's be normal. what's to summer. reverted would predicting have looks it early currently the like

Chris Jeffrey

thanks. Great,

Danny Oliver

Thank you.

Operator

One moment.

Mizuho. comes our from For question question next with next Blum Michael our

Fargo, Wells Wells sorry Your I'm Michael line sorry, open. Blum Fargo. is with

Michael Blum

a everyone. are gasoline like it of I Good volumes pipelines have based been holding about data looks refined least your At better. like late, ask EIA volumes up that wanted weaker on morning, it system. or on product your bit nationwide, but little looks to

talk that and into 'XX? can So the case that's do continue through you to you expect just why

Danny Oliver

It's seen we've our in tell significantly that quarter, January, this you is above at market running than Michael, would versus anticipate running volumes a right and of to our January I you have there at we've their at Denver. pretty due to expect experience. levels. the that tight would reacted supply really Sure. utilization rates at created pre-pandemic increase will up to that volumes outage Suncor market is. what seasonal refinery in least Most We in has or fourth a help -- that Danny. saw usually they even refineries by some customers demand in their due pre-pandemic refinery in of you normally January. higher issues

Brad Barron

XXXX. levels we regions where typically remind mean, by country pipeline I of everybody, I just that our of other has variability are. don't that pre-pandemic would of see given pipelines do, September would add the the I returned some our to the

So I mean pretty been, running then. much we've we've been there since

Michael Blum

to do helps an exit pointing about of it year-end That rate bit then did you rate provide? to perfect. sounds for you the of Permian slow wanted growth XXXX, typically that sort but I growth for you're a expectations the ask think have versus 'XX, like just you Okay, and us like

Danny Oliver

excuse lull we averages little really It's we're the be But of to offset months obviously, forward 'XX perspective, in We're around year, back expect beat look the just of in from just But for PLA that barrels-a-day of an at looking -- PLA -- in growth XXXX, current to activity next the a annual we'll year. kind versus XXX,XXX first prices forecasted few going 'XX. me by what in expect somewhere to some EBITDA beat have curve we thing. a we 'XX. realized timing we

Michael Blum

Okay, very much. great. Thank you

Danny Oliver

you. Thank

Operator

for time. the question not at Pam showing call I further And Schmidt back remarks. turn to I'm this over any closing any

Pam Schmidt

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

Operator

does this gentlemen, today's presentation. and Ladies conclude

a have day. disconnect wonderful now may and You

NuStar Energy (NS) 1 Feb 232022 Q4 Earnings call transcript