NuStar Energy Investor Conference Presentation Deck
NuStar
NuStar Energy L.P. utilizes financial measures, such as earnings before interest, taxes, depreciation and amortization (EBITDA), distributable cash flow (DCF) and distribution
coverage ratio, which are not defined in U.S. generally accepted accounting principles (GAAP). Management believes these financial measures provide useful information to
investors and other external users of our financial information because (i) they provide additional information about the operating performance of the partnership's assets and
the cash the business is generating, (ii) investors and other external users of our financial statements benefit from having access to the same financial measures being utilized
by management and our board of directors when making financial, operational, compensation and planning decisions and (iii) they highlight the impact of significant
transactions. We may also adjust these measures and/or calculate them based on continuing operations, to enhance the comparability of our performance across periods.
Our board of directors and management use EBITDA and/or DCF when assessing the following: (i) the performance of our assets, (ii) the viability of potential projects, (iii) our
ability to fund distributions, (iv) our ability to fund capital expenditures and (v) our ability to service debt. In addition, our board of directors uses EBITDA, DCF and a distribution
coverage ratio, which is calculated based on DCF, as some of the factors in its compensation determinations. DCF is used by the master limited partnership (MLP) investment
community to compare partnership performance. DCF is used by the MLP investment community, in part, because the value of a partnership unit is partially based on its yield,
and its yield is based on the cash distributions a partnership can pay its unitholders.
None of these financial measures are presented as an alternative to net income, or for any periods presented reflecting discontinued operations, income from continuing
operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP. For purposes of segment or asset
system reporting, we do not allocate general and administrative expenses because those expenses relate primarily to the overall management at the entity level. Therefore,
EBITDA reflected in the segment or asset system reconciliations exclude any allocation of general and administrative expenses consistent with our policy for determining
segmental operating income, the most directly comparable GAAP measure.
The following is a reconciliation of operating (loss) income to EBITDA to adjusted EBITDA for the Permian Crude System (in thousands of dollars):
Three Months Ended
Operating (loss)
income
Depreciation
and
amortization
expense
Reconciliation of Non-GAAP Financial Information
EBITDA
Goodwill
impairment
loss (a)
Adjusted
EBITDA
June
30,
2017
Sept.
30,
2017
June
30,
2018
Dec. 31, Mar. 31,
2017
Sept.
30,
2018
Dec. 31,
2018
June Sept.
30,
30,
2019
Mar. 31,
2019
Dec. 31,
2019
Mar. 31,
2020
Dec. 31, Mar. 31,
2020
2021
2018
2019
$(3,424) $1,050 $ 650 $(1,847) $3,605 $11,546 $10,878 $5,358 $13,543 $17,280 $21,132 $(106,476) $14,481 $17,627 $13,523 $16,912
10,227 11,005 13,165 13,477 15,059 15,235 16,589 17,647 17,182 18,114 18,154
6,803 12,055 13,815 11,630 18,664 26,781 27,467 23,005 30,725 35,394 39,286
(a) Represents a non-cash goodwill impairment charge.
June
30,
2020
126,000
Sept.
30,
2020
18,606 18,928 20,115 19,579 19,694
(87,870) 33,409 37,742 33,102 36,606
$6,803 $12,055 $13,815 $11,630 $18,664 $26,781 $27,467 $23,005 $30,725 $35,394 $39,286 $ 38,130 $33,409 $37,742 $33,102 $36,606
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