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NuStar Energy L.P. Reports Solid Second Quarter 2023 Earnings Results

Balance Sheet Continues to Strengthen with Repurchase of More Series D Preferred Units

Pipeline Segment’s Operating Income Up Seven Percent Quarter-Over-Quarter

Fuels Marketing Segment Reports Another Strong Quarter

West Coast Region’s Revenues Up Approximately 30 Percent Quarter-Over-Quarter

Positive Outlook for Remainder of 2023

NuStar Energy L.P. (NYSE: NS) today announced solid results for the second quarter of 2023 fueled by strong volumes in its refined products and Ammonia pipelines.

“I am pleased to report that we have delivered another quarter of positive results, and we are on track to achieve all of our strategic priorities this year,” said NuStar Chairman and CEO Brad Barron.

“One of our top stated priorities is to continue to strengthen our balance sheet,” Barron said. “And in June and July, we took another big step forward in that regard by repurchasing another 8.1 million Series D preferred units, leaving only about one-third of the original issuance still outstanding. Although our second quarter earnings per unit were impacted by the premium paid to redeem these units, totaling $0.29 per unit, we are pleased to have significantly strengthened our balance sheet and are on track to redeem all of the remaining Series D units by the end of 2024, which is two years ahead of our original schedule.”

“NuStar reported net income of $46 million for the second quarter of 2023, and largely as a result of the $0.29 per unit premium charge, a $0.20 net loss per unit, compared to net income of $59 million, or $0.20 per unit, for the second quarter of 2022,” said Barron. “It is important to note that earnings before interest, taxes, depreciation and amortization (EBITDA) were not impacted by the premium associated with the accelerated repurchase of the Series D preferred units, and we reported EBITDA of $169 million for the second quarter of 2023, which is comparable to second quarter of 2022 adjusted EBITDA of $174 million."

Operations Continue to Perform Well

NuStar’s Pipeline Segment generated operating income of $108 million and EBITDA of $152 million in the second quarter of 2023, compared to operating income of $101 million and EBITDA of $145 million in the second quarter of 2022.

“Our refined products systems and our Ammonia Pipeline System continued to deliver solid, dependable revenue contributions, with throughput up three percent in the second quarter of 2023 compared to the second quarter of 2022, reflecting the strength of these assets and our position in the markets we serve in the mid-Continent and throughout Texas,” said Barron. “In addition, our McKee System continued to perform well, with higher revenues and throughputs versus the same period last year, due to increased demand across the system, as well as a customer’s maintenance issues in the second quarter of 2022.”

Barron highlighted the strong performances of NuStar’s Fuels Marketing Segment and West Coast Renewable Fuels Strategy.

“After a near record-breaking 2022, our Fuels Marketing Segment has reported another strong quarter in 2023, generating operating income and EBITDA of $7 million, which is comparable to the segment’s strong second quarter of 2022 results,” said Barron. “In addition, thanks in large part to our West Coast Renewable Fuels strategy, our West Coast region delivered another great quarter with revenues approximately 30 percent higher compared to the second quarter of 2022.”

NuStar’s Permian Crude System volumes averaged 508,000 barrels per day (BPD), down slightly compared to second quarter of 2022 volumes.

“Our second quarter Permian volumes reflected some producer-specific operational issues and delays in the first half of the year that we expect to be resolved over the remainder of the year,” said Barron. “As those issues are resolved and those producers ramp up activity, we expect volumes to pick up. In fact, we have already seen an uptick in July with volumes averaging almost 530,000 barrels per day and we continue to expect to exit 2023 in the range of 570,000 to 600,000 barrels per day.”

Balance Sheet Continues to Strengthen

NuStar Executive Vice President and Chief Financial Officer Tom Shoaf gave a positive update on the company’s continued progress in building its financial strength and flexibility.

“We are pleased that we ended the second quarter of 2023 with a debt-to-EBITDA ratio of 3.73 times,” said Shoaf. “By accelerating the repayment of the Series D units over the course of this past year, while at the same time taking the necessary steps to protect our healthy debt-to-EBITDA metric, we have demonstrated our commitment to continuing to improve our balance sheet."

“We ended the second quarter of 2023 with $750 million available on our $1 billion unsecured revolving credit facility. And on June 30, we announced that we renewed our unsecured revolving credit agreement, maintaining the facility’s $1 billion capacity and extending the maturity of the facility an additional 21 months to January 2027.”

Shoaf stated that even with the accelerated repayment of the Series D units, NuStar is still on track to finish the year with a healthy debt-to-EBITDA ratio below four times.

Positive Outlook for Remainder of 2023

Shoaf also gave an update on full-year guidance for net income and adjusted EBITDA, as well as strategic capital and reliability capital for 2023.

“We expect to generate full-year 2023 net income in the range of $252 to $290 million and full-year 2023 adjusted EBITDA in the range of $700 to $760 million,” said Shoaf.

He also noted that NuStar plans to spend $125 to $145 million in strategic capital in 2023.

“While we continue to expect to exit the year with our Permian Crude System’s volumes between 570,000 to 600,000 barrels per day, we are now forecasting lower spending for our Permian System in the range of $35 to $45 million,” said Shoaf. “We continue to expect to spend around $25 million to expand our West Coast Renewable Fuels Network.

“In addition, we still expect to spend between $25 and $35 million on reliability this year.”

Bright Outlook for Ammonia System

Barron closed by highlighting a project that was announced last quarter, which will connect NuStar’s Ammonia Pipeline System to OCI Global’s state-of-the-art ammonia products facility in Iowa. This project, which is supported by a long-term revenue commitment, is on track to be in service next year.

“We expect this healthy-return, low-capital project will meaningfully increase utilization of our Ammonia Pipeline System,” said Barron. “And we expect this project to be just the first of several, as we are actively working with a number of potential customers interested in connections to our system, across our footprint, for a variety of different opportunities.”

Barron continued, “As we have mentioned in past calls, we are seeing burgeoning interest in lower carbon ammonia. Interest from the companies developing “blue” and “green” ammonia production facilities that need market access, as well as from companies interested in the supply of lower carbon ammonia to make fertilizer, Diesel Exhaust Fluid (DEF) and other important products. We are also talking to a number of potential customers who are looking at new uses for lower carbon ammonia, including as a low-cost, safe way to transport hydrogen for fuel.

“In addition to the “greening” of ammonia increasing demand in the domestic ammonia market, international ammonia demand is also driving interest in building or converting logistics to export ammonia produced here in the U.S. Our Ammonia Pipeline System currently supplies the U.S.’ breadbasket in the Midwest primarily with domestically produced ammonia, but growing interest in export capabilities could drive additional utilization of not only our Ammonia Pipeline System but also potentially our St. James facility, which has dock capacity and a footprint to support ammonia storage and export. We are excited about this growing interest in ammonia, and the actionable opportunities that interest is generating, for our Ammonia Pipeline System and beyond, in the near-term and over the next several years,” Barron concluded.

Conference Call Details

A conference call with management is scheduled for 9:00 a.m. CT on Thursday, August 3, 2023, to discuss the financial and operational results for the second quarter of 2023. Persons interested in listen-only participation may access the conference call directly at https://edge.media-server.com/mmc/p/hu7hrnep. Persons interested in Q&A participation may pre-register for the conference call and obtain a dial-in number and passcode at https://register.vevent.com/register/BI2ecc56df0e114ea58ced5740b23a1940. A recorded version will be available two hours after the conclusion of the conference call at https://edge.media-server.com/mmc/p/hu7hrnep.

The conference call may also be accessed through the “Investors” section of NuStar Energy L.P.’s website at https://investor.nustarenergy.com.

NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, Texas, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids. The partnership’s combined system has approximately 49 million barrels of storage capacity, and NuStar has operations in the United States and Mexico. For more information, visit NuStar Energy L.P.’s website at www.nustarenergy.com and its Sustainability page at https://sustainability.nustarenergy.com/.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes, and the related conference call will include, forward-looking statements regarding future events and expectations, such as NuStar’s future performance, plans and expenditures. All forward-looking statements are based on NuStar’s beliefs as well as assumptions made by and information currently available to NuStar. These statements reflect NuStar’s current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in NuStar Energy L.P.’s 2022 annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements. Except as required by law, NuStar does not intend, or undertake any obligation, to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information

(Unaudited, Thousands of Dollars, Except Unit, Per Unit and Ratio Data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Statement of Income Data:

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Service revenues

$

275,367

 

 

$

278,067

 

 

$

560,633

 

 

$

543,372

 

Product sales

 

102,967

 

 

 

152,090

 

 

 

211,568

 

 

 

296,648

 

Total revenues

 

378,334

 

 

 

430,157

 

 

 

772,201

 

 

 

840,020

 

Costs and expenses:

 

 

 

 

 

 

 

Costs associated with service revenues:

 

 

 

 

 

 

 

Operating expenses

 

93,363

 

 

 

94,948

 

 

 

182,525

 

 

 

181,350

 

Depreciation and amortization expense

 

62,530

 

 

 

62,240

 

 

 

124,584

 

 

 

125,543

 

Total costs associated with service revenues

 

155,893

 

 

 

157,188

 

 

 

307,109

 

 

 

306,893

 

Costs associated with product sales

 

86,914

 

 

 

134,178

 

 

 

180,375

 

 

 

260,893

 

Impairment loss

 

 

 

 

 

 

 

 

 

 

46,122

 

General and administrative expenses

 

31,620

 

 

 

27,909

 

 

 

60,345

 

 

 

54,980

 

Other depreciation and amortization expense

 

1,037

 

 

 

1,823

 

 

 

2,592

 

 

 

3,647

 

Total costs and expenses

 

275,464

 

 

 

321,098

 

 

 

550,421

 

 

 

672,535

 

Gain on sale of assets

 

 

 

 

 

 

 

41,075

 

 

 

 

Operating income

 

102,870

 

 

 

109,059

 

 

 

262,855

 

 

 

167,485

 

Interest expense, net

 

(58,170

)

 

 

(50,941

)

 

 

(115,541

)

 

 

(100,759

)

Other income, net

 

2,633

 

 

 

2,012

 

 

 

7,142

 

 

 

5,683

 

Income before income tax expense

 

47,333

 

 

 

60,130

 

 

 

154,456

 

 

 

72,409

 

Income tax expense

 

1,192

 

 

 

931

 

 

 

2,379

 

 

 

898

 

Net income

$

46,141

 

 

$

59,199

 

 

$

152,077

 

 

$

71,511

 

 

 

 

 

 

 

 

 

Basic and diluted net (loss) income per common unit

$

(0.20

)

 

$

0.20

 

 

$

0.42

 

 

$

(0.02

)

Basic and diluted weighted-average common units outstanding

 

110,905,471

 

 

 

110,306,641

 

 

 

110,893,293

 

 

 

110,242,201

 

 

 

 

 

 

 

 

 

Other Data (Note 1):

 

 

 

 

 

 

 

Adjusted net income

$

46,141

 

$

57,635

 

$

111,002

 

$

114,925

Adjusted net income per common unit

$

0.09

 

$

0.19

 

$

0.34

 

$

0.38

EBITDA

$

169,070

 

$

175,134

 

$

397,173

 

$

302,358

Adjusted EBITDA

$

169,070

 

$

173,570

 

$

356,098

 

$

346,916

DCF

$

36,592

 

$

83,002

 

$

178,402

 

$

174,060

Adjusted DCF

$

72,924

 

$

83,002

 

$

173,659

 

$

174,060

Distribution coverage ratio

0.82x

 

1.88x

 

2.01x

 

1.97x

Adjusted distribution coverage ratio

1.64x

 

1.88x

 

1.96x

 

1.97x

 

For the Four Quarters Ended June 30,

 

2023

 

2022

Consolidated Debt Coverage Ratio

3.73x

 

3.93x

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information - Continued

(Unaudited, Thousands of Dollars, Except Barrel Data)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

2023

 

 

 

2022

 

Pipeline:

 

 

 

 

 

 

 

Crude oil pipelines throughput (barrels/day)

 

1,111,120

 

 

 

1,220,758

 

 

1,217,610

 

 

 

1,264,678

 

Refined products and ammonia pipelines throughput (barrels/day)

 

597,162

 

 

 

582,182

 

 

596,396

 

 

 

572,767

 

Total throughput (barrels/day)

 

1,708,282

 

 

 

1,802,940

 

 

1,814,006

 

 

 

1,837,445

 

 

 

 

 

 

 

 

 

Throughput and other revenues

$

206,701

 

 

$

200,565

 

$

419,884

 

 

$

389,248

 

Operating expenses

 

55,042

 

 

 

55,170

 

 

104,817

 

 

 

103,273

 

Depreciation and amortization expense

 

43,855

 

 

 

44,442

 

 

87,405

 

 

 

89,270

 

Segment operating income

$

107,804

 

 

$

100,953

 

$

227,662

 

 

$

196,705

 

Storage:

 

 

 

 

 

 

 

Throughput (barrels/day) (a)

 

391,495

 

 

 

446,057

 

 

446,798

 

 

 

464,191

 

 

 

 

 

 

 

 

 

Throughput terminal revenues

$

23,839

 

 

$

30,929

 

$

51,154

 

 

$

57,370

 

Storage terminal revenues

 

54,370

 

 

 

57,854

 

 

107,712

 

 

 

119,334

 

Total revenues

 

78,209

 

 

 

88,783

 

 

158,866

 

 

 

176,704

 

Operating expenses

 

38,321

 

 

 

39,778

 

 

77,708

 

 

 

78,077

 

Depreciation and amortization expense

 

18,675

 

 

 

17,798

 

 

37,179

 

 

 

36,273

 

Impairment loss

 

 

 

 

 

 

 

 

 

46,122

 

Segment operating income

$

21,213

 

 

$

31,207

 

$

43,979

 

 

$

16,232

 

Fuels Marketing:

 

 

 

 

 

 

 

Product sales

$

93,426

 

 

$

140,809

 

$

193,453

 

 

$

274,069

 

Cost of goods

 

86,349

 

 

 

133,741

 

 

179,535

 

 

 

259,864

 

Gross margin

 

7,077

 

 

 

7,068

 

 

13,918

 

 

 

14,205

 

Operating expenses

 

567

 

 

 

437

 

 

842

 

 

 

1,030

 

Segment operating income

$

6,510

 

 

$

6,631

 

$

13,076

 

 

$

13,175

 

Consolidation and Intersegment Eliminations:

 

 

 

 

 

 

 

Revenues

$

(2

)

 

$

 

$

(2

)

 

$

(1

)

Cost of goods

 

(2

)

 

 

 

 

(2

)

 

 

(1

)

Total

$

 

 

$

 

$

 

 

$

 

Consolidated Information:

 

 

 

 

 

 

 

Revenues

$

378,334

 

 

$

430,157

 

$

772,201

 

 

$

840,020

 

Costs associated with service revenues:

 

 

 

 

 

 

 

Operating expenses

 

93,363

 

 

 

94,948

 

 

182,525

 

 

 

181,350

 

Depreciation and amortization expense

 

62,530

 

 

 

62,240

 

 

124,584

 

 

 

125,543

 

Total costs associated with service revenues

 

155,893

 

 

 

157,188

 

 

307,109

 

 

 

306,893

 

Costs associated with product sales

 

86,914

 

 

 

134,178

 

 

180,375

 

 

 

260,893

 

Impairment loss

 

 

 

 

 

 

 

 

 

46,122

 

Segment operating income

 

135,527

 

 

 

138,791

 

 

284,717

 

 

 

226,112

 

Gain on sale of assets

 

 

 

 

 

 

41,075

 

 

 

 

General and administrative expenses

 

31,620

 

 

 

27,909

 

 

60,345

 

 

 

54,980

 

Other depreciation and amortization expense

 

1,037

 

 

 

1,823

 

 

2,592

 

 

 

3,647

 

Consolidated operating income

$

102,870

 

 

$

109,059

 

$

262,855

 

 

$

167,485

(a)

Prior period throughputs for our Corpus Christi North Beach terminal in the storage segment were restated consistent with current period presentation.

NuStar Energy L.P. and Subsidiaries

Reconciliation of Non-GAAP Financial Information

(Unaudited, Thousands of Dollars, Except Ratio Data)

Note 1: 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 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 a financial indicator 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. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP.

The following is a reconciliation of net income to EBITDA, DCF and distribution coverage ratio.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income

$

46,141

 

 

$

59,199

 

 

$

152,077

 

 

$

71,511

 

Interest expense, net

 

58,170

 

 

 

50,941

 

 

 

115,541

 

 

 

100,759

 

Income tax expense

 

1,192

 

 

 

931

 

 

 

2,379

 

 

 

898

 

Depreciation and amortization expense

 

63,567

 

 

 

64,063

 

 

 

127,176

 

 

 

129,190

 

EBITDA

 

169,070

 

 

 

175,134

 

 

 

397,173

 

 

 

302,358

 

Interest expense, net

 

(58,170

)

 

 

(50,941

)

 

 

(115,541

)

 

 

(100,759

)

Reliability capital expenditures

 

(7,379

)

 

 

(6,696

)

 

 

(10,735

)

 

 

(13,405

)

Income tax expense

 

(1,192

)

 

 

(931

)

 

 

(2,379

)

 

 

(898

)

Long-term incentive equity awards (a)

 

3,018

 

 

 

2,734

 

 

 

5,986

 

 

 

5,563

 

Preferred unit distributions

 

(32,126

)

 

 

(31,523

)

 

 

(64,859

)

 

 

(62,615

)

Impairment loss

 

 

 

 

 

 

 

 

 

 

46,122

 

Income tax benefit related to impairment loss

 

 

 

 

 

 

 

 

 

 

(1,144

)

Premium on redemption of Series D Cumulative Convertible Preferred Units

 

(36,332

)

 

 

 

 

 

(36,332

)

 

 

 

Other items

 

(297

)

 

 

(4,775

)

 

 

5,089

 

 

 

(1,162

)

DCF

$

36,592

 

 

$

83,002

 

 

$

178,402

 

 

$

174,060

 

 

 

 

 

 

 

 

 

Distributions applicable to common limited partners

$

44,363

 

 

$

44,128

 

 

$

88,759

 

 

$

88,293

 

Distribution coverage ratio (b)

0.82x

 

1.88x

 

2.01x

 

1.97x

(a)

We intend to satisfy the vestings of these equity-based awards with the issuance of our common units. As such, the expenses related to these awards are considered non-cash and added back to DCF. Certain awards include distribution equivalent rights (DERs). Payments made in connection with DERs are deducted from DCF.

(b)

Distribution coverage ratio is calculated by dividing DCF by distributions applicable to common limited partners.

NuStar Energy L.P. and Subsidiaries

Reconciliation of Non-GAAP Financial Information - Continued

(Unaudited, Thousands of Dollars, Except per Unit and Ratio Data)

The following is the reconciliation for the calculation of our Consolidated Debt Coverage Ratio, as defined in our revolving credit agreement (the Revolving Credit Agreement).

 

For the Four Quarters Ended June 30,

 

 

2023

 

 

 

2022

 

Operating income

$

504,183

 

 

$

190,045

 

Depreciation and amortization expense

 

257,222

 

 

 

262,228

 

Goodwill impairment loss

 

 

 

 

34,060

 

Other impairment losses

 

 

 

 

201,030

 

Amortization expense of equity-based awards

 

14,337

 

 

 

13,801

 

Pro forma effect of dispositions (a)

 

 

 

 

(10,077

)

Other

 

(2,199

)

 

 

481

 

Consolidated EBITDA, as defined in the Revolving Credit Agreement

$

773,543

 

 

$

691,568

 

 

 

 

 

Long-term debt, less current portion of finance leases

$

3,310,561

 

 

$

3,137,275

 

Finance leases (long-term)

 

(50,356

)

 

 

(51,959

)

Unamortized debt issuance costs

 

30,635

 

 

 

35,924

 

NuStar Logistics' floating rate subordinated notes

 

(402,500

)

 

 

(402,500

)

Consolidated Debt, as defined in the Revolving Credit Agreement

$

2,888,340

 

 

$

2,718,740

 

 

 

 

 

Consolidated Debt Coverage Ratio (Consolidated Debt to Consolidated EBITDA)

3.73x

 

3.93x

(a)

This adjustment represents the pro forma effects of the dispositions of the Point Tupper terminal, which was sold in April 2022 and the Eastern U.S. terminals, which were sold in October 2021.

The following are reconciliations of net income / net (loss) income per common unit to adjusted net income / adjusted net income per common unit.

 

Three Months Ended June 30,

 

2023

 

2022

 

Net income / net (loss) income per common unit

$

46,141

 

$

(0.20

)

 

$

59,199

 

 

$

0.20

 

Premium on redemption of Series D Cumulative Convertible Preferred Units

 

 

 

0.29

 

 

 

 

 

 

 

Gain on sale of assets

 

 

 

 

 

 

(1,564

)

 

 

(0.01

)

Adjusted net income / adjusted net income per common unit

$

46,141

 

$

0.09

 

 

$

57,635

 

 

$

0.19

 

 

Six Months Ended June 30,

 

2023

 

2022

 

Net income / net income (loss) per common unit

$

152,077

 

 

$

0.42

 

 

$

71,511

 

 

$

(0.02

)

Premium on redemption of Series D Cumulative Convertible Preferred Units

 

 

 

 

0.29

 

 

 

 

 

 

 

Gain on sale of assets

 

(41,075

)

 

 

(0.37

)

 

 

(1,564

)

 

 

(0.01

)

Impairment loss

 

 

 

 

 

 

 

46,122

 

 

 

0.42

 

Income tax benefit related to impairment loss

 

 

 

 

 

 

 

(1,144

)

 

 

(0.01

)

Adjusted net income / adjusted net income per common unit

$

111,002

 

 

$

0.34

 

 

$

114,925

 

 

$

0.38

 

NuStar Energy L.P. and Subsidiaries

Reconciliation of Non-GAAP Financial Information - Continued

(Unaudited, Thousands of Dollars, Except per Ratio Data)

The following is a reconciliation of EBITDA to adjusted EBITDA.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

 

2022

 

EBITDA

$

169,070

 

$

175,134

 

 

$

397,173

 

 

$

302,358

 

Gain on sale of assets

 

 

 

(1,564

)

 

 

(41,075

)

 

 

(1,564

)

Impairment loss

 

 

 

 

 

 

 

 

 

46,122

 

Adjusted EBITDA

$

169,070

 

$

173,570

 

 

$

356,098

 

 

$

346,916

 

The following is a reconciliation of DCF to adjusted DCF and adjusted distribution coverage ratio.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

 

2022

DCF

$

36,592

 

$

83,002

 

$

178,402

 

 

$

174,060

Premium on redemption of Series D Cumulative Convertible Preferred Units

 

36,332

 

 

 

 

36,332

 

 

 

Gain on sale of assets

 

 

 

 

 

(41,075

)

 

 

Adjusted DCF

$

72,924

 

$

83,002

 

$

173,659

 

 

$

174,060

 

 

 

 

 

 

 

 

Distributions applicable to common limited partners

$

44,363

 

$

44,128

 

$

88,759

 

 

$

88,293

Adjusted distribution coverage ratio (a)

1.64x

 

1.88x

 

1.96x

 

1.97x

(a)

Adjusted distribution coverage ratio is calculated by dividing adjusted DCF by distributions applicable to common limited partners.

The following is a reconciliation of projected net income to EBITDA and adjusted EBITDA.

 

Projected for the Year Ended December 31, 2023

Net income

$

252,000 - 290,000

Interest expense, net

235,000 - 245,000

Income tax expense

4,000 - 6,000

Depreciation and amortization expense

250,000 - 260,000

EBITDA

741,000 - 801,000

Gain on sale of assets

 

(41,000)

Adjusted EBITDA

$

700,000 - 760,000

The following are reconciliations for our reported segments of operating income to segment EBITDA.

 

Three Months Ended June 30, 2023

 

Pipeline

 

Storage

 

Fuels Marketing

Operating income

$

107,804

 

$

21,213

 

$

6,510

Depreciation and amortization expense

 

43,855

 

 

18,675

 

 

Segment EBITDA

$

151,659

 

$

39,888

 

$

6,510

 

 

 

 

 

 

 

Three Months Ended June 30, 2022

 

Pipeline

 

Storage

 

Fuels Marketing

Operating income

$

100,953

 

$

31,207

 

$

6,631

Depreciation and amortization expense

 

44,442

 

 

17,798

 

 

Segment EBITDA

$

145,395

 

$

49,005

 

$

6,631

 

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