NuStar Energy(US:NS)2023-02-23 20:00Financial Performance - For the year ended December 31, 2022, total revenues increased by $64.7 million to $1,683.2 million compared to $1,618.5 million in 2021[30]. - Net income for 2022 was $222.7 million, an increase of $184.5 million from $38.2 million in 2021, primarily due to higher operating income from pipeline and fuels marketing segments[31]. - Pipeline segment revenues increased by $66.0 million to $828.2 million for the year ended December 31, 2022, compared to $762.2 million in 2021, with total throughput rising by 31,843 barrels per day to 1,898,600 barrels per day[70]. - The fuels marketing segment reported a $91.9 million increase in product sales, totaling $520.5 million for the year ended December 31, 2022[95]. - Segment operating income for the fuels marketing segment increased by $22.4 million to $33.5 million for the year ended December 31, 2022, driven by higher fuel prices[95]. - Total revenues for the storage segment decreased by $93.1 million to $334.5 million for the year ended December 31, 2022, compared to $427.7 million in 2021[91]. - Revenues and net income for non-guarantor subsidiaries totaled $858.8 million and $150.3 million, respectively, for the year ended December 31, 2022[132]. Capital Expenditures and Investments - Capital expenditures for 2022 totaled $140.63 million, with strategic capital expenditures at $107.86 million and reliability capital expenditures at $32.78 million[119]. - Expected capital expenditures for 2023 are projected to be between $130 million and $150 million for strategic projects and between $25 million and $35 million for reliability projects[120]. - The company plans to redeem 16,346,650 Series D Preferred Units in 2023 and 2024, ahead of the holders' redemption option in 2028[101]. - The company expects to spend approximately $60 million on expansion projects in the Permian Basin and $25 million on renewable fuels network expansion in 2023[120]. Debt and Financing - As of December 31, 2022, the company had outstanding debt obligations totaling approximately $3.4 billion, with various maturity dates extending to 2043[126]. - The consolidated debt coverage ratio was 3.98x and the consolidated interest coverage ratio was 2.17x as of December 31, 2022[111]. - The company has a $100 million Receivables Financing Agreement, which was amended to extend the termination date to January 31, 2025[114]. - The interest rate on the Revolving Credit Agreement is 6.9% as of December 31, 2022, while the Receivables Financing Agreement has an interest rate of 6.0%[126]. - The current debt ratings are BB- from Fitch, Ba3 from Moody's, and BB from S&P, all with a stable outlook[113]. Operational Highlights - The company operates 29 terminal and storage facilities in the U.S. and one in Nuevo Laredo, Mexico, with a total storage capacity of 36.4 million barrels as of December 31, 2022[72]. - The Point Tupper terminal facility was sold for $60.0 million, with a storage capacity of 7.8 million barrels, resulting in a non-cash pre-tax impairment loss of $46.1 million recognized in Q1 2022[22]. - The company’s crude oil refinery storage tanks are integrated with Valero Energy's refineries, minimizing competition for these services[88]. - The company has implemented multiple layers of cybersecurity measures to protect against cyberattacks, although risks remain[176]. Customer and Market Dynamics - The two largest customers accounted for approximately 24% and 11% of total segment revenues for the year ended December 31, 2022[62]. - The two largest customers of the storage segment accounted for approximately 33% and 14% of total revenues for the year ended December 31, 2022, indicating a concentrated customer base[84]. - Competition is primarily based on transportation charges, customer service quality, and proximity to end users[63]. - Public sentiment against fossil fuels may decrease demand for the company's products, impacting operations and financial results[225]. Environmental and Regulatory Considerations - The company operates under extensive international, federal, state, and local environmental laws, which could lead to increased capital expenditures and operating expenses in the future[164]. - The company is currently remediating subsurface contamination at several facilities, with costs related to these activities expected not to materially affect financial condition[170]. - The company believes that compliance costs with environmental regulations will not have a material impact on its competitive position or financial condition[164]. - Future regulatory changes could lead to increased capital expenditures and operating costs, adversely affecting the company's financial condition[229]. Employee and Safety Metrics - As of December 31, 2022, NuStar Energy had 1,167 employees, with a voluntary turnover rate averaging 3.7% over the last five years[144][148]. - The total recordable incident rate (TRIR) for 2022 was 0.23, significantly better than the industry average of 4.0 for bulk terminals[153]. - Approximately 91% of eligible U.S. terminals have achieved OSHA's Voluntary Protection Program (VPP) Star status as of December 31, 2022[153].