NuStar Energy's (NS) CEO Brad Barron on Q4 2016 Results - Earnings Call Transcript

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NuStar Energy L.P. (NYSE:NS) Q4 2016 Earnings Conference Call January 31, 2017 10:00 AM ET

Executives

Chris Russell - IR

Brad Barron - CEO

Tom Shoaf - CFO

Danny Oliver - SVP Marketing and Business Development

Analysts

Gabe Moreen - Bank of America Merrill Lynch

Theresa Chen - Barclays

Jeremey Tonet - JPMorgan

Selman Akyol - Stifel

Brian Zarahn - Mizuho

Ryan Levine - Citi

Anil Sebal - Seaport Global Securities

Operator

Good day, ladies and gentlemen, and welcome to the NuStar Energy L.P. and NuStar GP Holdings LLC Fourth Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference may be recorded.

I would now turn the call over to your host, Chris Russell, Treasurer, Vice President of Investor Relations. Please go ahead.

Chris Russell

Thank you, Stephanie. Good morning everyone and welcome to today’s call. On the call today are Brad Barron, NuStar Energy LP and NuStar GP Holdings LLC’s President and CEO; and Tom Shoaf, Executive Vice President and CFO, along with other members of our management team.

Before we get started, we’d like to remind you that during the course of this call, NuStar management will make statements about our current views concerning the future performance of NuStar that are forward-looking statements. These statements are subject to the various risks, uncertainties and assumptions described in our filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements.

During the course of this call, we will also make reference to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to GAAP measures. Reconciliations of certain of these non-GAAP financial measures to U.S. GAAP may be found in our earnings press release, with additional reconciliations located on the financials page of the investors section of our Web site at nustarenergy.com and nustargpholdings.com.

Now, I’m going to turn the call over to Brad.

Brad Barron

Good morning, thanks for joining us today. Earlier today we released our released our results for the fourth quarter and full year 2016. Once again demonstrated the resiliency and strength of our pipeline and storage operations during the year of sustained low commodity prices.

For the fourth quarter we covered our distribution by 1.02 times marking our 11th conservative quarter of distribution coverage and more importantly we covered our distribution for a third conservative year with a full year 2016 coverage ratio of 1.07 times.

If you recall, as part of the sale of our Asphalt operations in early 2014, we agreed to provide a term loan and credit support to Axeon. Recently the owner of Axeon informed us they've entered into an agreement to sell Axeon’s Asphalt marketing business. Upon closing this sale, which is expected by the end of the second quarter this year, we agreed to accept 110 million in cash and the elimination of all credit support obligations as final payment.

Due to this pending sale we wrote down the carrying value of the term loan to the agreed upon amount resulting in a $59 million non-cash charge that was added back as an adjustment to DCF. With this in mind you will note at the fourth quarter of 2016, we reported a net loss of $0.31 per unit and for the year, we reported net income of $1.27 per unit. Both these amounts include the $59 million non-cash charge, we feel this is a small price to pay to not only receive a $110 million cash payment that will reduce the amount capital we need to fund our future growth capital needs, but also to eliminate any future obligation to Axeon in the form of credit support.

As you all know, 2016 was a tough year for the oil industry, but as we have discussed many times in the past, we are not just crude oil MLP, we are a well-diversified, fee based MLP with high quality assets in strategic locations. This is more evident than ever during 2016, as improved results to somewhere storage facilities and on several of our refined products pipeline systems offset some of the reduced earnings that we experienced as a result of lower crude oil prices.

Within our storage segment, we saw year-over-year increases in lease revenue in many of our flagship facilities, while some of our refined product pipelines benefited from increased refinery utilization rates and the expansion project on our Central East Pipeline System. Despite the severe headwinds in our industry, NuStar Energy's common units provided 38% total return, which significantly outperformed the overall market and the Alerian MLP index. What's even more impressive is that over the last three year, NuStar Energy's common units provided a total return of 26% during one of the worst energy downturns in recent memory, while the Alerian MLP index generated a negative 16% return.

Now before I turn the call over to Tom, I would like to provide a quick recap on some of the major milestones we achieved during 2016 and also provide you an update on our 2017 spending program. During 2016, we reactivated 2.5 million barrels of idle tankage at our Piney Point, Maryland facility. These tanks were currently leased through the end of 2017, if you recall this facility had been mothballed for the past few years.

Additionally, we renegotiated 9.5 million barrels of long term storage at favorable rates at our St. Eustatius facility. And as I briefly mentioned earlier, during the year we also expanded our Central East Pipeline System, this expansion allowed us to increase distillate and propane supply throughout the upper mid-west. The additional volumes made possible by this project were a key contributor to some of the increased refined products pipeline throughputs we saw in this past year.

On the M&A side, in December, we close on a transaction to purchase a crude oil and refined products terminal from Martin Midstream and paid $93 million and the acquisition is immediately accretive to earnings. Based on current volumes, we expect the acquisition to generate a seven times EBITDA multiple based on an annual average EBITDA estimate of approximately $13.5 million.

With the completion of this acquisition, our Corpus Christi terminals now include over 3.7 million barrels of total storage with direct connectivity of two Premian pipeline system coming out of the Eagle Ford as well as State of the arts docks in Corpus Christi. Additionally, these new assets have already begun to provide synergies with our existing north-east terminal and will provide for future expansion and growth.

From a financing perspective 2016 was a very busy year for us. During the year, we repatriated approximately $100 million worth of cash from our international operations. In the third quarter, we used our aftermarket program to issue approximately 600,000 common units for net proceed of around 28 million, and in the fourth quarter we issued 226.5 million of 8.5% perpetual preferred units with the cost significant lower than issuing NuStar common equity.

With these 2016 financing activities, along with the 110 million of proceeds we expect to receive upon closing on sale of Axeon’s Asphalt Marketing business during 2017, we have effectively prefunded most of the capital that we need for our 2017 strategic capital spending.

To update you on our capital spending program, for 2017 we plan to spend 470 million to 490 million of strategic capital. The program includes approximately 100 million of facility enhancements, at our St. Eustatius terminal and an additional 170 million to 190 million of projects spread across our system, including an expansion of our New York Harvard capacity at our Linden, New Jersey terminal, completion of the remaining propane projects in our Central East System, several facility upgrades in our West Coast operations and a planned expansion at one of our large UK facilities. We expect all these projects to generate an EBITDA multiple in the six to eight times range.

In addition, we've earmarked approximately 200 million for our pending pipeline project with Pemex to supply Northern Mexico with LPGs and the refined products. So you can see we have great plans for 2017.

With that I'm going to turn the call over to Tom Shoaf, NuStar's Executive Vice President and CFO to provide you with some additional details on our 2016 financial results and 2017 projections. Tom?

Tom Shoaf

Thanks Brad and good morning everyone. As Brad previously mentioned, this morning we reported that we once again covered our distribution by 1.02 times in the fourth quarter marking the 11th consecutive quarter that we have produced above a 1.00 times coverage ratio.

For the year, we've covered distribution by 1.07 times, our third consecutive year about 1.00 times. For the fourth quarter of 2016 we reported a net loss of $0.31 per unit and for the year we reported net income of $1.27 per unit.

EBITDA from continuing operations was $83 million for the fourth quarter of 2016. As a reminder, these announce includes a $59 million non-cash charge related to the write down of our term loan to Axeon which Brad discussed earlier in the call. DCF from continuing operations available to common limited partners was $88 million for the fourth quarter of 2016.

Turning to the segment results, fourth quarter 2016 EBITDA in our storage segment was 78 million, down 7 million compared to the fourth quarter of 2015. Higher renewal rates, increased utilization and lower operating expense across the segment were offset by lower Eagle Ford throughputs volume and our Corpus Christi North Beach Terminal as compared to the same period last year. Fourth quarter 2016 EBITDA and our pipeline segment was 85 million, 5 million lower than the fourth quarter of 2015.

Throughputs on our crude oil pipeline assets were down 14% or 61,000 barrels per day when compared to the fourth quarter of 2015, also due to the decrease in Eagle Ford shell production transported our South Texas crude system. Throughputs on our refined product pipelines decrease by about 4,000 barrels per day, compared to the fourth quarter of 2015 mainly due to the lower naphtha demand on our Burgos pipeline, however these Burgos volumes are covered by a throughput and efficiency agreement and we will be paid for the throughput efficiency in the first quarter of 2017.

Fourth quarter 2016 EBITDA in our fuels marketing segment was 3 million comparable to the same quarter last year. Our December 31 debt balance was 3.1 billion, while our debt-to-EBITDA ratio decreased to 4.3 times. On January 27 NuStar Energy announced a 2016 Series A preferred unit distribution of around $0.65 per unit which will be paid on March 15, and a fourth quarter common unit distribution of $1.095 per unit which will be paid on February 13th. NuStar GP Holdings also announced a fourth quarter distribution of $0.545 per unit, which will be paid on February 15th.

Now, let me spend a few minutes talking about our projections for 2017. We continue to expect NuStar's 2017 total EBITDA to be 600 -- 650 million. This EBITDA estimate still assumes 100 million to 110 million of general and administrative expenses in 2017, they are not allocated to our segments EBITDA results. These projections include incremental EBITDA from the strategic capital projects completed in 2016 and 2017, the benefit from higher renewal rates recently negotiated at some of our terminals combined with additional EBITDA projected from recently acquired Corpus Christi terminal assets from Martin Midstream.

Additionally, the 2017 EBITDA estimate assume near minimum take or pay contract volumes for our South Texas crude oil pipeline system for the entire year, allowing for possible upside to our estimates of production when the Eagle Ford ramps up in 2017. As Brad mentioned earlier, we now plan to spend 470 million to 490 million on 2017 strategic capital.

Our current strategic capital spending guidance is down 60 million from the guidance we provided on the third quarter earnings call, primarily due to some spending on Pemex projects and few other projects being deferred into early 2018. We expect our 2017 reliability spending to continue to be in the range of 35 million to 55 million. And based on these 2017 estimates, we expect to cover our distribution for the full year 2017.

Before I turn the call back over to Brad, I want to reemphasize the quality and the performance of our stable fee based pipeline and storage operations. In our pipeline segment we are over 90% committed to either take or pay, or structurally exclusive arrangements. Our Eagle Ford operations which are the only part of our business directly impacted by crude production has minimum volume commencements in place with strong creditworthy customers and comprised less than 15% of our total 2016 segment EBITDA.

Our storage segment continued to benefit from increased utilization and we were able to negotiate many contracts at favorable rates. As of December 31st, 95% of our leasable storage was utilized. And from a financing perspective, during 2016, we raised enough capital through repatriation and equity markets to fund most of our 2017 growth capital needs.

And with that, I will turn the call back over to Brad for any closing remarks.

Brad Barron

Thanks Tom. 2016 was one of the most challenging years in the history of the energy industry, but it was a great year for NuStar and I’m very proud of what we accomplish. In 2016, we focused on our core business and we delivered strong distribution coverage. We outperformed most of our peers by leveraging our strengths, our diverse assets, our strategic direction, our fiscal discipline and our outstanding operations.

I want to take a moment to praise our employees, whose dedication to operational excellence in 2016 was truly impressive. Here at NuStar we always emphasize working safely and last year our employees had the best safety record in our history. On top of that, our employees are good environmental stewards and have an outstanding environmental performance. With that performance in perspective, last year we transported over 700 million barrels of product and we experienced the release of one-half, of actually less than one-half of one ten-millionth of the products we moved, which is an all-time record for us and an outstanding performance for our employees.

So I want to thank our employees for the ongoing commitment to safety and to environmental excellence. Both of these accomplishments are good for our employees, good for our environment and good for our bottom-line. So summing up, this year we're going to stay true to our strategy and focus on our core business and solid distribution coverage and I expect another strong showing in 2017.

At this time, we’ll turn it over to the operator and we can open it up to Q&A.

Question-and-Answer Session

Operator

Thank you. [Operator Instruction] Our first question comes from Gabe Moreen with Bank of America Merrill Lynch. Your line is open.

Gabe Moreen

Quick question from me, in terms of, it seems like a lot more Permian barrels have potentially common into Corpus Christi year over time, can you just talk about your positioning, I guess, in the Corpus Christi markets, whether you expect to benefit directly from some of those Permian volumes coming in and how that might also fit with the Martin acquisition?

Danny Oliver

Right now, we are not -- this is Danny Oliver, we're not hooked up to any of those Permian pipelines coming down in the Corpus. Although we are working some projects to do just that, as well as looking for some opportunity for another main trunk line into the Corpus Christi area. So right now all of our storage assets in the docks are hooked up to Eagle Ford pipeline, but we are looking to make those connections in the near future.

Brad Barron

We also mentioned in the Martin acquisition, that terminal positions us well to take advantage of the connections that Danny is talking about.

Gabe Moreen

Got it. Thanks guys. And I assume that is not necessarily in the '17 CapEx budget at this point or it wouldn’t be huge CapEx dollars anyway?

Brad Barron

Right.

Gabe Moreen

Okay. Another question from me Brad is, I guess in terms of the opportunities you are looking at, is it -- we -- you talked in the past about I think feeling somewhat constrained in terms of ability to spend CapEx including the '17 CapEx was a lot bigger than it's been the last couple of years. Is it fair to say you are kind of feeling past constrains, or you feel like you are still high grading projects here in terms of what you're evaluating overall?

Brad Barron

I feel like we've moved past most of those constrains. As you know, in the last year the market was frozen for everybody in the first half of the year and then it opened up significantly. And Tom and his team did a great job of taking advantage of the opening markets. And as we mentioned here, we've pretty much prefunded most of what we need in order to execute on our plans for 2017. So we could forget about where we are sitting right now.

Gabe Moreen

And then last question from me, this is on Pemex, in terms of sort of what the next steps or milestones are in that project, I guess, to get the timeline really firmed up there?

Brad Barron

Yes, we'd like to see it firmed up as well. I mean we've had very positive discussions. You've heard me say on the last couple of earnings call, we had positive discussions with the very top leaders at Pemex and I think the next challenge, as you know there's been a lot of distractions in Mexico, discussions in the United States and then opening up of the Mexican oil markets and so we just need to bring everybody back to the table and get something signed. So, we will be working on that here in the next month or so.

Gabe Moreen

Okay, good luck. Thanks guys.

Operator

Our next question comes from Theresa Chen with Barclays. Your line is open.

Theresa Chen

Tom, I wanted to follow up on your comments related to Eagle Ford and just given that we've seen some positive news related to the activity there and taking into account obviously, that there is a lag with volumes coming online. But can you talk more about your outlook for your systems there in 2017 and namely when you might expect to see an uplift if at all and how much?

Tom Shoaf

Yes, I mean I think, Danny Oliver, is better that suited to answer that. But I think we put a slight uptick in 2017 during the back half of the year, not very much, I mean for the most part we have seen a lot of -- some rig count improvement and all that going on in the Eagle Ford. But we're being a little bit conservative here in 2017. So, first half we're still running minimum volume commitments and our forecast in the back half, it ramps up just slightly. But Danny, I don’t know if you want to add anything to that.

Danny Oliver

I think that pretty much cover it. It's just a few thousand barrels a day, in the back half of the year we ramped it up, but if we continue to see rig counts increased like we've seen in the last six months or so. We probably are a little conservative in the back half of the year.

Theresa Chen

Got it. And related to the Delta and Strategic capital spend of 470 to 490 versus previous estimate of 530 to 550. Can you talk about how much of that was related to less CapEx budgeted for Pemex and which of the smaller projects you plan to differ into 2018?

Tom Shoaf

Yes, we said that it was about 58 million to 60 million that we decreased our capital guidance for 2017 and half of that is related to Pemex project and just the normal delays going on there that everybody is aware of. We also decreased our St. Eustatius project that we also talked about in 2017 and push some of that spending out into 2018 as well. That was about 10 million that got pushed out. And it was a couple of other projects in Texas City that also made up about another 20 million of that number.

Theresa Chen

And lastly in regards to your fuels marketing business, I realize it’s a very small portion of your business right now. But that uptick we saw in fourth quarter is that at all sustainable?

Brad Barron

It's hard to say it’s a margin based business, so it can be better, it can be worst, but it's been -- we haven’t talked about this in a while but we've stripped a lot of the risk out of that business and mostly what we do is pretty reliable. So I think it was right on line with the 2015 fourth quarter, I hope to discontinue that.

Operator

Our next question comes from Jeremey Tonet with JPMorgan. Your line is open.

Jeremey Tonet

I was just hoping on the storage segment you can provide a little bit more color there, is it kind of down year-over-year, quarter-over-quarter? And is that just from the Eagle Ford, the terminals there and has that kind of a troughed that activity and do you see renewal rates kind of still moving up or any more color you can provide there?

Brad Barron

Sure, we have seen all across 2016 increased rates as we renew. We believe we'll continue to see that as terms expire going forward into 2017. But the shortfall in the quarter was all related to the Eagle Ford, everything else would have been up, but we have the one terminal that receives those pipeline volumes out of the Eagle Ford, it was obviously down year-over-year.

Tom Shoaf

Just to reiterate, we take Corpus Christi North Beach out of that which is tied to the Eagle Ford, we had a really good year in storage, so it really -- all the other stuff really helped compensate for that downfall in Eagle Ford in 2016.

Jeremey Tonet

Got it. As far as the issues with Oxy as far as your conversations there, is there anything else that you can update us with regards to that pipeline?

Brad Barron

Not really. I mean, we’re still in the early stages of litigation and so there is really nothing to report there. They have several other projects, so that we're working on that pipeline including the Pemex bill is one of them, so it’s not holding us back from pursuing other deals.

Jeremey Tonet

Got you, great. And just one last one for me, I guess if thinking about the preferred shares that you guys issued, just curious how that would be presented in the future, if -- that would show up in the DCF reconciliation or how we should think about that?

Brad Barron

I mean the preferred we account for is equity, so on the equity section of the balance sheet.

Tom Shoaf

The distribution will roll through the DCF section, and it's in this quarter as well, in the other line item in the DCF statement.

Jeremey Tonet

Great. That’s it for me. Thank you.

Operator

Our next question comes from Selman Akyol with Stifel. You are line is open.

Selman Akyol

Just following up a little bit on storage in the Eagle Ford, the Martin acquisition, I know you guys have previously talked about the synergies. Can you, I guess, talk a little bit more about those, are they operational synergies, are they marketing synergies and how quickly do you expect to get an uplift?

Brad Barron

I think we’ll get some immediate uplift on those synergies. A lot of its operational, we have a facility, they don’t quite share a fence line, but almost. But the way that we can now -- we have some shared dock assets between the two companies and now that we own it we can schedule those assets in such a way that we can increase throughput on those assets.

Tom Shoaf

The thing that's important to remember about that acquisition is, we’re not relaying on synergies to make that accretive, that’s accretive day one, based on existing businesses.

Selman Akyol

Got it, it’s helpful. And then I was to think about a more robust Eagle Ford environment. is there any way to get bookends on what it might mean in terms of an uplift to cash flow or EBITDA, 2% to 5%? Is there any kind of guidance you could give along those lines?

Brad Barron

So every 10,000 barrels of increased volume is $5 million annually. So your guess is as good as mine, is what we can see in 2017 on increases, has a lot to do obviously with crude price.

Selman Akyol

Got you. And then last one for me. So I know you said, you think you’ve got most of your CapEx covered, and any shortfall, we should just look for that to be done off the ATM?

Brad Barron

Yes. I mean, like we’ve said, we’ve spelled out what our capital program is in 2017 and we think, especially from an equity perspective, we think that we’ve got what we need to do taken care of already. Now if we did anymore on the ATM, it would just be opportunistic, it'd because something new came in or something like that. But in terms of the guidance that we’ve given you. We think we pretty much have all we need on equity. We do have a bond offering that we have forecasting towards the backend of the year, we’ll see if we really need that. A lot of that is dependent upon when Pemex gets done. How much spend there ends up being in 2017 for that particular project.

Operator

Our next question comes from Brian Zarahn with Mizuho. Your line is open.

Brian Zarahn

Just following up on the last question. You don’t have much equity financing needs this year, but you have pursued alternatives sources of equity, are potential non-core asset sales something you may look at?

Brad Barron

We don’t have that many non-core assets, we've done a great job of utilizing the assets that we have and you take Piney Point, that thing is not functional for several years and BD guys have filled that thing up. So there might be a few very small things, but they're not needle movers.

Brian Zarahn

Okay. And then on repatriation, is that mostly completed or do you have potential room if tax is changed, and maybe make it even more economic?

Brad Barron

Well, yes. I mean, when we're completed with what we want to do so far. Like we said on the notes, we repatriated about a 100 million in 2016. So everything we had planned to do is done already. Now we will say that as long as those international entities continue to generate cash, there will be more that can be repatriated in the future because the things that we change, the things that we structure differently or on an ongoing basis, Brian, so as we generate cash, we can continue to bring it down.

Brian Zarahn

And then couple of housekeeping items in the quarter, can you tell us what expansion CapEx and the cash balance was in the fourth quarter?

Brad Barron

Cash balance was up $35 million. And [Multiple Speakers] 35 million.

Brian Zarahn

35, okay.

Brad Barron

What did you ask for maintenance capital, Brian? Is that what you asked for?

Brian Zarahn

Expansion CapEx?

Brad Barron

Expansion CapEx was about 47 million.

Brian Zarahn

Thanks, that’s all for me.

Operator

Our next question comes from the line of Ryan Levine with Citi. Your line is open.

Ryan Levine

Regarding the P&I contract timeline, what's the current expectation that’s in your 2017 CapEx guidance as to spending would and when a contract would be signed. Are you assuming that one to two months from now in your budget for your previous comments?

Brad Barron

Yes, as far as Pemex project goes, we've already started spending money and we've spent some in '16 small amount, but we did spend some in '16. We are planning to continue that, we are getting to a point where we need to get things signed up to spend any really big dollars. So that’s kind of the big hold up and that’s why I said earlier that some of the CapEx associated with that project has slipped into '18. It's just every day that this thing doesn’t get signed up, it's slips. So right now, we have about 200 million slated for 2017 spend. And the assumes roughly maybe end of the first quarter signing.

Ryan Levine

Okay, right. Do you think that’s continue on headlines dying down on U.S.-Mexican relation?

Tom Shoaf

In our discussions with our counterparts at Pemex that has not been an issue. So it's not anything that we've -- that they've directly addressed with us.

Ryan Levine

Okay. And in Q4 '16 results, what portion of EBITDA is attributable to strategic spending over the past 12 months, so if you could -- is there any way of quantifying organic year-over-year performance, as opposed to inorganic?

Brad Barron

I mean, I don’t know. I mean, as far as the projects that came out of that and incremental EBITDA, we're really looking at our Central East Project that were the big incremental contributors that we'll see going forward in 2017 EBITDA. I hope I answered your question.

Ryan Levine

Okay thank you.

Operator

Our next question comes from Anil Sebal with Seaport Global Securities. Your line is open.

Anil Sebal

I just wanted to see what kind of adjustments go into the leverage metrics that you mentioned, 4.3x debt-EBITDA at the end of '16?

Brad Barron

Yes, you are asking about the 4.3 times debt to EBITDA. Yes, that’s what it was at the end of 2016. Looking at 2017 we are probably planning to be around the 4.4 times to 4.5 times.

Tom Shoaf

Anil, were you asking for where that gets adjusted to get to that number?

Anil Sebal

Yes.

Tom Shoaf

Yes, on the debt side what we back, is we back up the hybrids that we issued back in 2013, that's about $400 million. And then we also back out about $40 million for the go-zone funds were help escrow, that on the debt side. Than on the EBITDA side, we are adding about $20 million for material project adjustments and for the income of the Martin acquisition.

Anil Sebal

And I assume your covenants kind of allow for those adjustments, correct?

Tom Shoaf

Correct.

Anil Sebal

And could you remind us where your covenants stand now, and is there any adjustments at needs to be done for this preferred offering?

Brad Barron

No. That preferred is treated strictly as equity, and our current debt to EBITDA covenant is 5.5 times because we get a half a turn uptick because of this recent Martin acquisition.

Anil Sebal

And that will turn down by the end of '17?

Brad Barron

No, that will return down at the end of the first quarter of '17. We get two quarters of uptick, second quarter back down to 5 times.

Operator

[Operator Instructions] Our next question comes from Jeremey Tonet with JPMorgan. Your line is open.

Jeremey Tonet

Just a real quick follow up on the last point there. The leverage I think you are referring to was credit facility adjusted. I was just curious if you give us a rating agency adjusted leverage, how that end?

Tom Shoaf

Your guess is as good as ours. I mean we typically add about half-turn or so to what our debt covenant ratio is, just give or take, it's about half a turn more for them I would guess. But that’s the little bit of a mystery to us.

Operator

I am showing no further questions. I will now turn the call back over Chris Russell for closing remarks.

Chris Russell

Thank Stephanie. Once again, I would like to thank everybody for joining us on the call today. If anybody has any additional follow up questions, please call NuStar's Investor Relations department. Thanks again.

Operator

Thank your ladies and gentlemen. That does conclude today's conference. You may all disconnect and everyone have a great day.

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