UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
 
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2019
NuStar Energy L.P.
(Exact name of registrant as specified in its charter)
Delaware
001-16417
74-2956831
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
 
19003 IH-10 West
San Antonio, Texas 78257
 
 
(Address of principal executive offices)
 
 
 
 
 
(210) 918-2000
 
 
(Registrant’s telephone number, including area code)
 
 
 
 
 
Not applicable
 
 
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common units
Fixed-to-floating rate cumulative redeemable perpetual preferred units
 
NS
NSprA, NSprB and NSprC
 
New York Stock Exchange
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).    
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 
 
 
 
 




Item 2.01    Completion of Acquisition or Disposition of Assets.

As previously disclosed in a Current Report on Form 8-K filed on May 10, 2019 by NuStar Energy L.P., a Delaware limited partnership (“ NuStar ”), on May 9, 2019, NuStar Pipeline Holding Company, LLC, a Delaware limited liability company (“ NPH ”), and NuStar Terminals Delaware, Inc., a Delaware corporation (“ NTD ” and together with NPH, the “ Sellers ”), both indirect wholly owned subsidiaries of NuStar, entered into a Share Purchase and Sale Agreement (the “ Purchase and Sale Agreement ”) with GTI Statia Holdings, N.V., a company with limited liability incorporated under the laws of the BES islands (the “ Purchaser ”) affiliated with Prostar Capital, a private investment firm focused on midstream energy infrastructure assets, to sell to the Purchaser all of the issued and outstanding stock of the Sellers’ subsidiaries that own NuStar’s St. Eustatius terminal facility and related operations (the “ Transaction ”).  The Transaction closed on July 29, 2019. The purchase price for the Transaction was approximately $250.0 million, subject to adjustments of the purchase price payable following closing.


Item 9.01    Financial Statements and Exhibits.

(b)     Pro Forma Financial Information. Unaudited pro forma condensed consolidated financial statements of NuStar Energy L.P. as of and for the three months ended March 31, 2019 and years ended December 31, 2018, 2017 and 2016, together with the related notes thereto, are filed as Exhibit 99.1 hereto and are incorporated herein by reference.

(d)     Exhibits.
Exhibit Number
 
EXHIBIT
 
 
 
 
Unaudited pro forma condensed consolidated financial statements of NuStar Energy L.P. as of and for the three months ended March 31, 2019 and the years ended December 31, 2018, 2017 and 2016, together with the related notes thereto






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
NUSTAR ENERGY L.P.
 
 
 
 
 
 
By:
Riverwalk Logistics, L.P.
 
 
its general partner
 
 
 
 
 
 
 
By:
NuStar GP, LLC
 
 
 
its general partner
 
 
 
 
 
Date: August 2, 2019
 
 
By:
/s/ Jorge A. del Alamo
 
 
 
Name:
Jorge A. del Alamo
 
 
 
Title:
Senior Vice President and Controller





Exhibit 99.1
NUSTAR ENERGY L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Introduction
Unless otherwise indicated, the terms “NuStar Energy,” “NS,” “the Partnership,” “we,” “our” and “us” are used in this report to refer to NuStar Energy L.P., to one or more of our consolidated subsidiaries or to all of them taken as a whole.
The following unaudited pro forma condensed consolidated financial statements give effect to the sale on July 29, 2019 of our equity interests in our wholly owned subsidiaries that own the St. Eustatius terminal operations, for approximately $250.0 million, subject to adjustment (the St. Eustatius Operations, and the sale thereof, the St. Eustatius Disposition), as well as the sale, on November 30, 2018 , of our European terminals and operations, for approximately $270.0 million (the European Operations, and the sale thereof, the European Disposition). We received net proceeds of $234.0 million for the St. Eustatius Disposition, after certain adjustments and subject to further adjustments following closing. The St. Eustatius Operations consist of a 14.3 million barrel storage and terminalling facility on the island of St. Eustatius in the Caribbean Netherlands and related assets and bunkering operations. The European Operations include six storage terminals in the United Kingdom and one facility in Amsterdam, with total storage capacity of approximately 9.5 million barrels, and related assets.
In the second quarter of 2019, we determined that the St. Eustatius Operations and the European Operations met the requirements to be reported as discontinued operations. We first adjusted the unaudited pro forma condensed consolidated statements of income for the St. Eustatius Disposition, since this disposition meets the requirements of a significant disposition of a business pursuant to Article 11 of Regulation S-X. We further adjusted the unaudited pro forma condensed consolidated statements of income for the years ended December 31, 2018, 2017 and 2016 to reflect the European Disposition, even though it did not meet the requirements of a significant disposition of a business pursuant to Article 11 of Regulation S-X, because the European Operations will be reported as discontinued operations together with the St. Eustatius Operations. Accordingly, unaudited pro forma condensed consolidated statements of income are presented as if the St. Eustatius Disposition and the European Disposition occurred on January 1, 2016.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2019 is presented as if the St. Eustatius Disposition occurred on that date. The unaudited pro forma condensed consolidated statement of income for the three months ended March 31, 2019 and balance sheet as of March 31, 2019 were not adjusted for the European Disposition since the sale occurred prior to the beginning of the quarterly period.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the audited historical consolidated financial statements of NuStar Energy L.P. included in its Annual Report on Form 10-K for the year ended December 31, 2018. The pro forma adjustments, as described in the notes to the unaudited pro forma condensed consolidated financial statements, are based upon available information and certain assumptions that we believe to be reasonable. The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the financial position that would have been obtained or the financial results that would have occurred if the St. Eustatius Disposition and European Disposition had been completed on the dates indicated, or in the future. In addition, the unaudited pro forma condensed consolidated financial statements do not give effect to the cost savings or other financial benefits we expect to result from the St. Eustatius Disposition and the European Disposition.












1



NUSTAR ENERGY L.P. AND SUBSIDIARIES
UNADUITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2019
(Thousands of Dollars)
 
NuStar Energy L.P. Historical
 
St. Eustatius Adjustments
 
 
 
Total NuStar Energy L.P.
Pro Forma
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
15,822

 
$
(1,581
)
 
(a)
 
$
248,241

 
 
 
234,000

 
(b)
 
 
Current assets, excluding cash and cash equivalents
210,123

 
(56,112
)
 
(a)
 
154,011

Total current assets
225,945

 
176,307

 
 
 
402,252

Property, plant and equipment, net
4,144,265

 
(217,982
)
 
(a)
 
3,926,283

Intangible assets, net
720,200

 

 
 
 
720,200

Goodwill
1,005,853

 

 
 
 
1,005,853

Other long-term assets, net
220,636

 
(36,034
)
 
(a)
 
184,602

Total assets
$
6,316,899

 
$
(77,709
)
 
 
 
$
6,239,190

Liabilities, Mezzanine Equity and Partners’ Equity
 
 
 
 
 
 
 
Current liabilities
$
321,386

 
$
(59,204
)
 
(a)
 
$
262,182

Long-term debt
3,333,220

 

 
 
 
3,333,220

Deferred income tax liability
11,787

 

 
 
 
11,787

Other long-term liabilities
193,536

 
(24,774
)
 
(a)
 
168,762

Total liabilities
3,859,929

 
(83,978
)
 
 
 
3,775,951

 
 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series D preferred limited partners
568,293

 

 
 
 
568,293

 
 
 
 
 
 
 
 
Partners’ equity:
 
 
 
 
 
 
 
Preferred limited partners
756,301

 

 
 
 
756,301

Common limited partners
1,192,080

 
6,269

 
(c)
 
1,198,349

Accumulated other comprehensive loss
(59,704
)
 

 
 
 
(59,704
)
Total partners’ equity
1,888,677

 
6,269

 
 
 
1,894,946

Total liabilities, mezzanine equity and partners’ equity
$
6,316,899

 
$
(77,709
)
 
 
 
$
6,239,190


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

















2



NUSTAR ENERGY L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2019
(Thousands of Dollars, Except Unit and Per Unit Data)
 
NuStar Energy L.P. Historical
 
Less:
St. Eustatius Operations Historical (d)
 
Total NuStar Energy L.P.
Pro Forma
Revenues
$
486,469

 
$
138,643

 
$
347,826

Costs and expenses:
 
 
 
 
 
Cost of revenues
363,013

 
116,602

 
246,411

Asset impairment loss
297,317

 
297,317

 

Goodwill impairment loss
31,123

 
31,123

 

General and administrative expenses (excluding depreciation and amortization expense)
25,996

 
305

 
25,691

Other depreciation and amortization expense
2,119

 

 
2,119

Total costs and expenses
719,568

 
445,347

 
274,221

Operating (loss) income
(233,099
)
 
(306,704
)
 
73,605

Interest (expense) income, net
(44,268
)
 
23

 
(44,291
)
Other income (expense), net
787

 
(4
)
 
791

(Loss) income before income tax expense
(276,580
)
 
(306,685
)
 
30,105

Income tax expense
1,283

 
101

 
1,182

Net (loss) income
(277,863
)
 
(306,786
)
 
28,923

 
 
 
 
 
 
Basic net loss per common unit:
$
(2.91
)
 
$
(2.85
)
 
$
(0.06
)
Basic weighted-average common units outstanding
107,531,619

 
 
 
107,531,619


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.















3



NUSTAR ENERGY L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2018
(Thousands of Dollars, Except Unit and Per Unit Data)
 
NuStar Energy L.P. Historical
 
Less:
St. Eustatius Operations Historical (d)
 
NuStar Energy L.P. Pro Forma excluding
St. Eustatius Operations Historical
 
Less:
European Operations Historical (d)
 
Total NuStar Energy L.P. Pro Forma
Revenues
$
1,961,757

 
$
374,716

 
$
1,587,041

 
$
66,779

 
$
1,520,262

Costs and expenses:
 
 
 
 
 
 
 
 
 
Cost of revenues
1,483,119

 
352,435

 
1,130,684

 
54,821

 
1,075,863

General and administrative expenses (excluding depreciation and amortization expense)
106,200

 
1,221

 
104,979

 
4,912

 
100,067

Other depreciation and amortization expense
8,875

 

 
8,875

 
271

 
8,604

Total costs and expenses
1,598,194

 
353,656

 
1,244,538

 
60,004

 
1,184,534

Operating income
363,563

 
21,060

 
342,503

 
6,775

 
335,728

Interest (expense) income, net
(186,237
)
 
29

 
(186,266
)
 
(1,868
)
 
(184,398
)
Other income (expense), net
39,876

(e)
78,515

(e)
(38,639
)
 
(43,841
)
(e)
5,202

Income before income tax expense
217,202

 
99,604

 
117,598

 
(38,934
)
 
156,532

Income tax expense
11,408

 

 
11,408

 
1,251

 
10,157

Net income (loss)
205,794


99,604

 
106,190


(40,185
)
 
146,375

 
 
 
 
 
 
 
 
 
 
Basic and diluted net (loss) income per common unit:
$
(2.77
)
(f)
$
0.97

 
$
(3.74
)
 
$
(0.40
)
 
$
(3.34
)
Basic weighted-average common units outstanding
99,490,495

 
 
 
99,490,495

 
 
 
99,490,495

Diluted weighted-average common units outstanding
99,531,172

 
 
 
99,531,172

 
 
 
99,531,172


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.









4



NUSTAR ENERGY L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2017
(Thousands of Dollars, Except Unit and Per Unit Data)
 
NuStar Energy L.P. Historical
 
Less:
St. Eustatius Operations Historical (d)
 
NuStar Energy L.P. Pro Forma excluding
St. Eustatius Operations Historical
 
Less:
European Operations Historical (d)
 
Total NuStar Energy L.P.
Pro Forma
Revenues
$
1,814,019

 
$
298,041

 
$
1,515,978

 
$
71,206

 
$
1,444,772

Costs and expenses:
 
 
 
 
 
 
 
 
 
Cost of revenues
1,356,803

 
262,921

 
1,093,882

 
55,611

 
1,038,271

General and administrative expenses (excluding depreciation and amortization expense)
112,240

 
1,264

 
110,976

 
3,420

 
107,556

Other depreciation and amortization expense
8,698

 

 
8,698

 
263

 
8,435

Total costs and expenses
1,477,741

 
264,185

 
1,213,556

 
59,294

 
1,154,262

Operating income
336,278

 
33,856

 
302,422

 
11,912

 
290,510

Interest (expense) income, net
(173,083
)
 
7

 
(173,090
)
 
(1,316
)
 
(171,774
)
Other expense, net
(5,294
)
 
(5,120
)
 
(174
)
 
(106
)
 
(68
)
Income before income tax expense
157,901

 
28,743

 
129,158

 
10,490

 
118,668

Income tax expense
9,937

 

 
9,937

 
2,164

 
7,773

Net income
$
147,964

 
$
28,743

 
$
119,221

 
$
8,326

 
$
110,895

 
 
 
 
 
 
 
 
 
 
Basic net income per common unit:
$
0.64

 
$
0.32

 
$
0.32

 
$
0.09

 
$
0.23

Basic weighted-average common units outstanding
88,825,964

 
 
 
88,825,964

 
 
 
88,825,964


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.


























5



NUSTAR ENERGY L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2016
(Thousands of Dollars, Except Unit and Per Unit Data)
 
NuStar Energy L.P. Historical
 
Less:
St. Eustatius Operations Historical (d)
 
NuStar Energy L.P. Pro Forma excluding
St. Eustatius Operations Historical
 
Less:
European Operations Historical (d)
 
Total NuStar Energy L.P. Pro Forma
Revenues
$
1,756,682

 
$
289,114

 
$
1,467,568

 
$
71,722

 
$
1,395,846

Costs and expenses:
 
 
 
 
 
 
 
 
 
Cost of revenues
1,290,237

 
258,043

 
1,032,194

 
57,395

 
974,799

General and administrative expenses (excluding depreciation and amortization expense)
98,817

 
1,230

 
97,587

 
4,605

 
92,982

Other depreciation and amortization expense
8,519

 

 
8,519

 
151

 
8,368

Total costs and expenses
1,397,573

 
259,273

 
1,138,300

 
62,151

 
1,076,149

Operating income
359,109

 
29,841

 
329,268

 
9,571

 
319,697

Interest (expense) income, net
(138,350
)
 
72

 
(138,422
)
 
(1,612
)
 
(136,810
)
Other (expense) income, net
(58,783
)
 
24

 
(58,807
)
 
(20
)
 
(58,787
)
Income before income tax expense
161,976

 
29,937

 
132,039

 
7,939

 
124,100

Income tax expense (benefit)
11,973

 
(1,850
)
 
13,823

 
936

 
12,887

Net income
$
150,003

 
$
31,787

 
$
118,216

 
$
7,003

 
$
111,213

 
 
 
 
 
 
 
 
 
 
Basic and diluted net income per common unit:
$
1.27

 
$
0.40

 
$
0.87

 
$
0.09

 
$
0.78

Basic weighted-average common units outstanding
78,080,484

 
 
 
78,080,484

 
 
 
78,080,484

Diluted weighted-average common units outstanding
78,113,002

 
 
 
78,113,002

 
 
 
78,113,002


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.









6



NUSTAR ENERGY L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a) To reflect the elimination of assets and liabilities included in the St. Eustatius Disposition.

(b) To reflect the receipt of $234.0 million of cash proceeds for the St. Eustatius Disposition, which is equal to the total purchase price of $250.0 million less the aggregate amount of certain adjustments.

(c) To reflect the difference between the carrying value of the assets and liabilities included in the St. Eustatius Disposition as of March 31, 2019 and the proceeds received.

(d) To reflect the elimination of the historical results of the St. Eustatius Operations and European Operations, which do not include anticipated savings from costs that we expect to be reduced or eliminated as a result of the sale of one or both of these operations.

(e) For the year ended December 31, 2018, "Other income (expense), net" included: (i) a $78.8 million gain recorded in the first quarter of 2018 to reflect insurance proceeds received related to hurricane damage at the St. Eustatius terminal facility and (ii) a loss of $43.4 million from the European Disposition in the fourth quarter of 2018.

(f) Basic and diluted net income per common unit includes a $3.79 loss attributable to the merger on July 20, 2018 of NuStar GP Holdings, LLC, which indirectly owns our general partner, with a subsidiary of NuStar Energy L.P. We accounted for the merger as an equity transaction, similar to a redemption or induced conversion of preferred stock, which resulted in the loss of $3.79 per common unit.







7