“2013 was a major turning point for NuStar as we took steps to significantly reduce our exposure to margin-based operations and continued to invest in the growth of our more stable pipelines and terminals business,” said Brad Barron, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC. “We’re starting to see the results of this strategic redirection as the first quarter is off to a good start.

“We’re excited about several important initiatives being announced today that are expected to help improve our earnings in 2014 and beyond. We have made tremendous progress on the expansion of our Corpus Christi dock, which is now expected to be in service later this month – several months ahead of schedule. We completed construction on our second rail-car offloading facility at our St. James terminal. We forged an agreement with Lindsay Goldberg to divest our remaining 50% interest in our Asphalt Joint Venture, and we completed an agreement with Oxy to re-activate our idled 12” pipeline between Mont Belvieu and Corpus Christi.

“We have made a lot of progress over the past couple of months, and we’re going to keep up the pace as everyone is focused on our goal of returning to one-to-one coverage of our distribution. Largely as a result of the improved adjusted EBITDA results in all three of our segments in 2013, NuStar’s fourth quarter distributable cash flow from continuing operations available to limited partners covered the distribution to the limited partners by 0.89 times, the highest quarterly coverage ratio since the third quarter of 2011. Based on our current projections, we expect to start exceeding a one-times coverage ratio in the second half of 2014 and for the full year 2014,” said Barron.

Fourth Quarter and Full Year Earnings Results

As a result of some of the non-cash charges described below, fourth quarter earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was negative $192.3 million compared to fourth quarter 2012 EBITDA of $81.8 million. For the year ended December 31, 2013, EBITDA from continuing operations was $127.2 million, higher than the $107.6 million in 2012.

NuStar Energy L.P. reported a fourth quarter net loss applicable to limited partners of $368.3 million, or $4.73 per unit, compared to a net loss applicable to limited partners of $21.2 million, or $0.27 per unit, reported in the fourth quarter of 2012. Without certain adjustments in the fourth quarters of both years, as described below, the fourth quarter of 2013 would have generated adjusted net income applicable to limited partners of $16.6 million, or $0.21 per unit, compared to the fourth quarter 2012 adjusted net income applicable to limited partners of $19.5 million, or $0.25 per unit.

For the year ended December 31, 2013, the company reported a net loss applicable to limited partners of $311.5 million, or $4.00 per unit, compared to a net loss applicable to limited partners of $263.3 million, or $3.61 per unit, in 2012. Without certain adjustments in both years, as described below, adjusted net income applicable to limited partners would have been $58.8 million, or $0.75 per unit, compared to 2012 adjusted net income applicable to limited partners of $53.6 million, or $0.73 per unit.

As previously announced on January 30, 2014, the fourth quarter 2013 distribution of $1.095 per unit will be paid on February 14, 2014 to holders of record as of February 10, 2014.

“Absent the impact of several non-cash adjustments, our fourth quarter 2013 results in both our fee-based pipeline and storage segments were higher than last year’s fourth quarter,” said Barron. “The completion of several internal growth projects in these segments contributed to the improved fourth quarter results.”

“I am also happy to note that our fuels marketing segment results were higher than last year’s fourth quarter as well.”

Fourth Quarter and Full Year Adjustments

Fourth quarter 2013 results include $403.6 million, or $4.94 per unit, of adjustments, primarily non-cash charges associated with the write-down of asset values and the value of goodwill assigned to several of the company’s terminal facilities. Fourth quarter 2012 results included $41.5 million, or $0.52 per unit, of expense items related primarily to hedge losses recorded following NuStar’s decision to sell the San Antonio refinery in December 2012, as well as a handful of cancelled capital projects.

Full year 2013 results include $388.8 million, or $4.75 per unit, of adjustments, comprised of the fourth quarter 2013 non-cash adjustments mentioned previously and other adjustment items. Full year 2012 results included $323.4 million, or $4.34 per unit of adjustments, which included the fourth quarter 2012 adjustments mentioned previously, and $281.9 million, or $3.82 per unit, of expense items resulting from deconsolidating the asphalt joint venture inSeptember 2012 and other adjustment items.

Internal Growth Project Update

In November, the company completed the construction of a second rail-car offloading facility at its St. James terminal in Louisiana. NuStar now has two rail-car facilities in operation at the terminal with a total offloading capacity of 100,000 to 200,000 barrels per day.

The construction of a new private dock at NuStar’s Corpus Christi North Beach terminal should be completed by the end of February 2014, far earlier than anticipated. The initial estimate for the completion of the dock was the second quarter of 2014. This new dock will more than double the current loading capacity of approximately 125,000 barrels per day and will allow NuStar to handle all the new volume associated with the Phase 1 and Phase 2 expansions of the South Texas Crude Oil Pipeline expansion, as well as additional volumes shipped to Corpus Christi.

Divestiture of 50% Interest in Asphalt Joint Venture

NuStar has entered into an agreement with an affiliate of Lindsay Goldberg LLC, a private investment firm, to divest its 50% voting interest in an asphalt joint venture that owns a refinery located in Paulsboro, New Jersey, a terminal located in Savannah, Georgia and the related working capital. Closing for the transaction is expected to be completed no later than February 28, 2014.

After the transaction is closed, a $250 million seven-year revolving credit facility between NuStar Logistics and the joint venture will be immediately converted to a $175 million term loan, dropping to a $150 million term loan six months after closing. The transaction calls for the loan to be paid off in full no later than September 2019. NuStar Logistics will continue to provide up to $150 million of credit support to the asphalt business, in the form of guarantees and letters of credit. This commitment begins declining two years after closing and terminates in September 2019.