10-Q 1 ns-20220331.htm 10-Q ns-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 1-16417
_________________________________________
ns-20220331_g1.jpg
NuStar Energy L.P.
(Exact name of registrant as specified in its charter)
_________________________________________
Delaware74-2956831
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
19003 IH-10 West
San Antonio, Texas
(Address of principal executive offices)
78257
(Zip Code)
Registrant’s telephone number, including area code (210918-2000
 _______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common unitsNSNew York Stock Exchange
Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred UnitsNSprANew York Stock Exchange
Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred UnitsNSprBNew York Stock Exchange
Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred UnitsNSprCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ    No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes þ    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerþAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No þ

The number of common units outstanding as of April 30, 2022 was 110,303,252.


NUSTAR ENERGY L.P.
FORM 10-Q
TABLE OF CONTENTS
 
2

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements
NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Thousands of Dollars, Except Unit Data)
March 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$8,398 $5,637 
Accounts receivable, net142,527 135,126 
Inventories19,310 16,644 
Prepaid and other current assets15,079 27,135 
Assets held for sale86,458  
Total current assets271,772 184,542 
Property, plant and equipment, at cost5,625,080 5,728,848 
Accumulated depreciation and amortization(2,171,692)(2,187,206)
Property, plant and equipment, net3,453,388 3,541,642 
Intangible assets, net546,679 557,785 
Goodwill732,356 732,356 
Other long-term assets, net125,730 140,007 
Total assets$5,129,925 $5,156,332 
Liabilities, Mezzanine Equity and Partners’ Equity
Current liabilities:
Accounts payable$70,360 $82,446 
Current portion of finance lease obligations4,000 3,848 
Accrued interest payable72,107 34,139 
Accrued liabilities54,447 79,818 
Taxes other than income tax10,196 14,475 
Liabilities held for sale66,496  
Total current liabilities277,606 214,726 
Long-term debt, less current portion3,168,425 3,183,555 
Deferred income tax liability2,848 11,831 
Other long-term liabilities137,763 147,956 
Total liabilities3,586,642 3,558,068 
Commitments and contingencies (Note 6)
Series D preferred limited partners (23,246,650 preferred units outstanding as of
March 31, 2022 and December 31, 2021) (Note 8)
621,018 616,439 
Partners’ equity (Note 9):
Preferred limited partners
Series A (9,060,000 units outstanding as of March 31, 2022 and December 31, 2021)
218,307 218,307 
Series B (15,400,000 units outstanding as of March 31, 2022 and December 31, 2021)
371,476 371,476 
Series C (6,900,000 units outstanding as of March 31, 2022 and December 31, 2021)
166,518 166,518 
Common limited partners (110,297,849 and 109,986,273 common units outstanding
as of March 31, 2022 and December 31, 2021, respectively)
239,010 299,502 
Accumulated other comprehensive loss(73,046)(73,978)
Total partners’ equity922,265 981,825 
Total liabilities, mezzanine equity and partners’ equity$5,129,925 $5,156,332 
See Condensed Notes to Consolidated Financial Statements.
3

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, Thousands of Dollars, Except Unit and Per Unit Data)
 Three Months Ended March 31,
 20222021
Revenues:
Service revenues$265,305 $271,883 
Product sales144,558 89,763 
Total revenues409,863 361,646 
Costs and expenses:
Costs associated with service revenues:
Operating expenses (excluding depreciation and amortization expense)
86,402 87,287 
Depreciation and amortization expense63,303 68,418 
Total costs associated with service revenues149,705 155,705 
Costs associated with product sales126,715 81,113 
Impairment loss46,122  
General and administrative expenses (excluding depreciation and amortization expense)
27,071 24,492 
Other depreciation and amortization expense1,824 2,047 
Total costs and expenses351,437 263,357 
Operating income58,426 98,289 
Interest expense, net(49,818)(54,918)
Other income, net3,671 398 
Income before income tax (benefit) expense12,279 43,769 
Income tax (benefit) expense(33)1,512 
Net income$12,312 $42,257 
Basic and diluted net (loss) income per common unit (Note 10)
$(0.22)$0.05 
Basic and diluted weighted-average common units outstanding110,177,045 109,506,222 
Comprehensive income$13,244 $44,377 
See Condensed Notes to Consolidated Financial Statements.

4

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, Thousands of Dollars)
 Three Months Ended March 31,
 20222021
Cash Flows from Operating Activities:
Net income$12,312 $42,257 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense65,127 70,465 
Amortization of unit-based compensation3,412 3,871 
Amortization of debt related items2,532 3,042 
Impairment loss46,122  
Changes in current assets and current liabilities (Note 11)
17,512 24,397 
Decrease in other long-term assets3,644 2,381 
Decrease in other long-term liabilities(662)(1,678)
Other, net(4,169)922 
Net cash provided by operating activities145,830 145,657 
Cash Flows from Investing Activities:
Capital expenditures(32,750)(40,463)
Change in accounts payable related to capital expenditures(14,498)(5,449)
Proceeds from insurance recoveries5,805  
Proceeds from sale or disposition of assets341 130 
Net cash used in investing activities(41,102)(45,782)
Cash Flows from Financing Activities:
Proceeds from long-term debt borrowings253,000 270,400 
Long-term debt repayments(268,800)(418,100)
Distributions to preferred unitholders(31,025)(31,887)
Distributions to common unitholders(44,041)(43,811)
Other, net(8,848)(2,331)
Net cash used in financing activities(99,714)(225,729)
Effect of foreign exchange rate changes on cash176 475 
Net increase (decrease) in cash, cash equivalents and restricted cash5,190 (125,379)
Cash, cash equivalents and restricted cash as of the beginning of the period14,439 162,426 
Cash, cash equivalents and restricted cash as of the end of the period$19,629 $37,047 
See Condensed Notes to Consolidated Financial Statements.
5

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY AND MEZZANINE EQUITY
Three Months Ended March 31, 2022 and 2021
(Unaudited, Thousands of Dollars, Except Per Unit Data)
Limited PartnersMezzanine Equity
 PreferredCommonAccumulated
Other
Comprehensive
Loss
Total Partners’ Equity
(Note 9)
Series D Preferred Limited Partners (Note 8)
Total
Balance as of January 1, 2022$756,301 $299,502 $(73,978)$981,825 $616,439 $1,598,264 
Net income (loss)15,238 (18,780) (3,542)15,854 12,312 
Other comprehensive income  932 932 — 932 
Distributions to partners:
Series A, B and C preferred
(15,238)— — (15,238)— (15,238)
Common ($0.40 per unit)
— (44,041)— (44,041)— (44,041)
Series D preferred
— — — — (15,854)(15,854)
Unit-based compensation
 6,910  6,910 — 6,910 
Series D preferred unit accretion
— (4,581)— (4,581)4,581  
Other    (2)(2)
Balance as of March 31, 2022$756,301 $239,010 $(73,046)$922,265 $621,018 $1,543,283 

Balance as of January 1, 2021$756,301 $572,314 $(96,656)$1,231,959 $599,542 $1,831,501 
Net income16,033 10,370  26,403 15,854 42,257 
Other comprehensive income  2,120 2,120 — 2,120 
Distributions to partners:
Series A, B and C preferred
(16,033)— — (16,033)— (16,033)
Common ($0.40 per unit)
— (43,811)— (43,811)— (43,811)
Series D preferred
— — — — (15,854)(15,854)
Unit-based compensation
 2,678  2,678 — 2,678 
Series D Preferred Unit accretion
— (4,021)— (4,021)4,021  
Other 7  7  7 
Balance as of March 31, 2021$756,301 $537,537 $(94,536)$1,199,302 $603,563 $1,802,865 
See Condensed Notes to Consolidated Financial Statements.
6

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION

Organization and Operations
NuStar Energy L.P. (NYSE: NS) is a Delaware limited partnership primarily engaged in the transportation, terminalling and storage of petroleum products and renewable fuels and the transportation of anhydrous ammonia. Unless otherwise indicated, the terms “NuStar Energy,” “NS,” “the Partnership,” “we,” “our” and “us” are used in this report to refer to NuStar Energy L.P., to one or more of our consolidated subsidiaries or to all of them taken as a whole. Our business is managed under the direction of the board of directors of NuStar GP, LLC, the general partner of our general partner, Riverwalk Logistics, L.P., both of which are indirectly wholly owned subsidiaries of ours.

We conduct our operations through our subsidiaries, primarily NuStar Logistics, L.P. (NuStar Logistics) and NuStar Pipeline Operating Partnership L.P. (NuPOP). We have three business segments: pipeline, storage and fuels marketing.

Recent Developments
Sale of Point Tupper Terminal. On April 29, 2022, we sold the equity interests in our wholly owned subsidiaries that own our Point Tupper terminal facility to EverWind Fuels for $60.0 million, plus working capital, which is subject to adjustment. The terminal facility has a storage capacity of 7.8 million barrels and has been included in the storage segment. We recognized a pre-tax impairment loss of $46.1 million in the first quarter of 2022 and expect to utilize the sales proceeds to reduce debt and thereby improve our debt metrics. Please refer to Note 3 for more information.

Debt Amendments. On January 28, 2022, we amended and restated our $1.0 billion unsecured revolving credit agreement to extend the maturity to April 27, 2025, replace the LIBOR-based interest rate and modify other terms. Also on January 28, 2022, we amended our $100.0 million receivables financing agreement to extend the scheduled termination date to January 31, 2025, replace the LIBOR-based interest rate and modify other terms. Please refer to Note 5 for more information.

Other Event
Selby Terminal Fire. On October 15, 2019, our terminal facility in Selby, California experienced a fire that destroyed two storage tanks and temporarily shut down the terminal. We received insurance proceeds of $5.8 million and $20.5 million for the three months ended March 31, 2022 and 2021, respectively. We recorded a gain from business interruption insurance of $4.0 million for the three months ended March 31, 2021, which is included in “Operating expenses” in the condensed consolidated statements of comprehensive income. Insurance proceeds for cleanup costs and business interruption are included in “Cash flows from operating activities” in the consolidated statements of cash flows. We believe we have adequate insurance to offset additional costs.

Basis of Presentation
These unaudited condensed consolidated financial statements include the accounts of the Partnership and subsidiaries in which the Partnership has a controlling interest. Inter-partnership balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and all disclosures are adequate. All such adjustments are of a normal recurring nature unless disclosed otherwise. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

We have reclassified certain previously reported amounts in the consolidated financial statements and notes to conform to current-period presentation.

7

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
2. NEW ACCOUNTING PRONOUNCEMENT

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
In August 2020, the Financial Accounting Standards Board (FASB) issued guidance intended to simplify the accounting for convertible instruments by eliminating certain accounting models for convertible debt instruments and convertible preferred stock, requiring the calculation of diluted earnings per unit to include the effect of potential unit settlement for any convertible instruments that may be settled in either cash or units, and amending the disclosure requirements for convertible instruments. The guidance is effective for annual periods beginning after December 15, 2021. Amendments may be applied using either a modified retrospective approach or a fully retrospective approach. We adopted the amended guidance on January 1, 2022 using the modified retrospective approach. While the amended guidance did not have a material impact on our financial position, results of operations, or disclosures at adoption, changes to the earnings per unit guidance could result in changes to our diluted net income (loss) per common unit. Please refer to Note 10 for additional information.

Reference Rate Reform
In March 2020, the FASB issued guidance intended to provide relief to companies impacted by reference rate reform. The amended guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The publication of U.S. dollar LIBOR rates for the most common tenors is expected to cease after publication on June 30, 2023, and, pursuant to the Adjustable Interest Rate (LIBOR) Act signed into law in the U.S. on March 15, 2022, the Board of Governors of the Federal Reserve System has been directed to select a benchmark replacement rate to automatically replace LIBOR in LIBOR-based contracts that lack adequate fallback provisions upon cessation. As of March 31, 2022, $402.5 million of our variable-rate debt uses LIBOR as a benchmark for establishing the interest rate. In addition, the distribution rate on our 8.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units is a floating rate based on LIBOR, and the distribution rates on our 7.625% Series B and 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units convert from fixed rates to floating rates based on LIBOR in June 2022 and December 2022, respectively. The FASB’s guidance is effective as of March 12, 2020 through December 31, 2022. We adopted the guidance on a prospective basis. The guidance did not have an impact on our financial position, results of operations or disclosures at transition, but we will continue to evaluate its impact on contracts modified on or before December 31, 2022.

3. DISPOSITION AND IMPAIRMENT

Sale of Point Tupper Terminal. On February 11, 2022, we entered into an agreement to sell the equity interests in our wholly owned subsidiaries that own our Point Tupper terminal facility in Nova Scotia, Canada (the Point Tupper Terminal Operations) to EverWind Fuels for $60.0 million, plus working capital, which is subject to adjustment. The terminal facility has a storage capacity of 7.8 million barrels and has been included in the storage segment. We completed the sale on April 29, 2022 and expect to utilize the sales proceeds to reduce debt and thereby improve our debt metrics as part of our strategic plan to strengthen our balance sheet. We compared the carrying value of the Point Tupper Terminal Operations, which includes $42.2 million in cumulative foreign currency translation losses accumulated since our acquisition of the Point Tupper terminal facility in 2005, to its fair value less costs to sell, and we recognized a pre-tax impairment loss of $46.1 million in the first quarter of 2022, which is presented in "Impairment loss" on the consolidated statement of comprehensive income. We believe that the sales price of $60.0 million provides a reasonable indication of the fair value of the Point Tupper Terminal Operations as it represents an exit price in an orderly transaction between market participants. The sales price is a quoted price for identical assets and liabilities in a market that is not active and, thus, our fair value estimate falls within Level 2 of the fair value hierarchy.


8

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
During the first quarter of 2022, we determined the Point Tupper Terminal Operations met the criteria to be classified as held for sale. Accordingly, the consolidated balance sheet reflects the assets and liabilities of the Point Tupper Terminal Operations as held for sale as of March 31, 2022. The following table provides the carrying amounts of the major classes of assets and liabilities included in “Assets held for sale” and “Liabilities held for sale” on the consolidated balance sheet:
March 31, 2022
(Thousands of Dollars)
Cash$2,429 
Accounts receivable1,138 
Inventories399 
Prepaid and other current assets1,792 
Property, plant and equipment, net of accumulated depreciation and impairment loss65,716 
Other long-term assets, net14,984 
Assets held for sale$86,458 
Accounts payable$2,636 
Deferred income tax liability7,638 
Accrued liabilities4,355 
Other long-term liabilities9,640 
Impairment reserve (cumulative translation losses)42,227 
Liabilities held for sale$66,496 

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Contract Assets and Contract Liabilities
The following table provides information about contract assets and contract liabilities from contracts with customers:
20222021
Contract AssetsContract LiabilitiesContract AssetsContract Liabilities
(Thousands of Dollars)
Balances as of January 1:
Current portion$2,336 $(15,443)$2,694 $(22,019)
Noncurrent portion504 (46,027)932 (47,537)
Total 2,840 (61,470)3,626 (69,556)
Activity:
Additions71 (9,645)92 (9,658)
Transfer to accounts receivable(2,037)— (1,990)— 
Transfer to revenues(83)12,117 (125)15,877 
Total (2,049)2,472 (2,023)6,219 
Balances as of March 31:
Current portion277 (13,454)733 (16,524)
Noncurrent portion448 (45,544)870 (46,813)
Held for sale66    
Total $791 $(58,998)$1,603 $(63,337)
9

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Remaining Performance Obligations
The following table presents our estimated revenue from contracts with customers for remaining performance obligations that has not yet been recognized, representing our contractually committed revenue as of March 31, 2022 (in thousands of dollars):
2022 (remaining)$315,545 
2023283,526 
2024189,426 
2025132,497 
202690,396 
Thereafter93,490 
Total$1,104,880 

Our contractually committed revenue, for purposes of the tabular presentation above, is limited to customer service contracts that have fixed pricing and fixed volume terms and conditions. The revenue shown above includes $19.2 million relating to our Point Tupper Terminal Operations that was held for sale as of March 31, 2022.

Disaggregation of Revenues
The following table disaggregates our revenues:
Three Months Ended March 31,
20222021
(Thousands of Dollars)
Pipeline segment:
Crude oil pipelines $86,124 $74,588 
Refined products and ammonia pipelines102,559 94,640 
Total pipeline segment revenues from contracts with customers188,683 169,228 
Storage segment:
Throughput terminals26,441 24,794 
Storage terminals (excluding lessor revenues)50,719 73,416 
Total storage segment revenues from contracts with customers
77,160 98,210 
Lessor revenues10,761 10,364 
Total storage segment revenues87,921 108,574 
Fuels marketing segment:
Revenues from contracts with customers
133,260 83,855 
Consolidation and intersegment eliminations(1)(11)
Total revenues$409,863 $361,646 

5. DEBT

Revolving Credit Agreement
On January 28, 2022, NuStar Logistics amended and restated its $1.0 billion unsecured revolving credit agreement (the Revolving Credit Agreement) to, among other things: (i) extend the maturity date from October 27, 2023 to April 27, 2025; (ii) increase the maximum amount of letters of credit capable of being issued from $400.0 million to $500.0 million; (iii) replace LIBOR benchmark provisions with customary secured overnight financing rate, or SOFR, benchmark provisions; (iv) remove the 0.50x increase permitted in our consolidated debt coverage ratio for certain rolling periods in which an acquisition for aggregate net consideration of at least $50.0 million occurs; and (v) add baskets and exceptions to certain negative covenants.

10

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
As of March 31, 2022, we had $106.5 million of borrowings outstanding and $888.7 million available for borrowing under the Revolving Credit Agreement. Letters of credit issued under the Revolving Credit Agreement totaled $4.8 million as of March 31, 2022 and limit the amount we can borrow under the Revolving Credit Agreement. Obligations under the Revolving Credit Agreement are guaranteed by NuStar Energy and NuPOP. The Revolving Credit Agreement provides for U.S. dollar borrowings, which bear interest, at our option, based on an alternative base rate or a SOFR-based rate. The Revolving Credit Agreement and certain fees under the Receivables Financing Agreement, defined below, are the only debt arrangements with interest rates that are subject to adjustment if our debt rating is downgraded (or upgraded) by certain credit rating agencies. As of March 31, 2022, our weighted-average interest rate related to borrowings under the Revolving Credit Agreement was 3.0%.

The Revolving Credit Agreement is subject to maximum consolidated debt coverage ratio and minimum consolidated interest coverage ratio requirements, which may limit the amount we can borrow to an amount that is less than the total amount available for borrowing. For a rolling period of four quarters, the consolidated debt coverage ratio (as defined in the Revolving Credit Agreement) cannot exceed 5.00-to-1.00, and the consolidated interest coverage ratio (as defined in the Revolving Credit Agreement) must not be less than 1.75-to-1.00. As of March 31, 2022, we believe that we are in compliance with the covenants in the Revolving Credit Agreement.

Receivables Financing Agreement
NuStar Energy and NuStar Finance LLC (NuStar Finance), a special purpose entity and wholly owned subsidiary of NuStar Energy, are parties to a $100.0 million receivables financing agreement with a third-party lender, with a scheduled termination date of January 31, 2025, (the Receivables Financing Agreement) and agreements with certain of NuStar Energy’s wholly owned subsidiaries (collectively with the Receivables Financing Agreement, the Securitization Program). NuStar Energy provides a performance guarantee in connection with the Securitization Program. Under the Securitization Program, certain of NuStar Energy’s wholly owned subsidiaries sell their accounts receivable to NuStar Finance on an ongoing basis, and NuStar Finance provides the newly acquired accounts receivable as collateral for its revolving borrowings under the Receivables Financing Agreement. NuStar Finance is a separate legal entity and the assets of NuStar Finance, including these accounts receivable, are not available to satisfy the claims of creditors of NuStar Energy, its subsidiaries selling receivables under the Securitization Program or their affiliates. The amount available for borrowing is based on the availability of eligible receivables and other customary factors and conditions. On January 28, 2022, the Receivables Financing Agreement was amended to, among other things: (i) extend the scheduled termination date from September 20, 2023 to January 31, 2025; (ii) reduce the floor rate in the calculation of our borrowing rates; and (iii) replace provisions related to the LIBOR rate of interest with references to SOFR rates of interest.

Borrowings under the Receivables Financing Agreement bear interest, at NuStar Finance’s option, at a base rate or a SOFR rate, each as defined in the Receivables Financing Agreement. As of March 31, 2022, the amount of borrowings outstanding under the Receivables Financing Agreement totaled $72.0 million, the weighted-average interest rate related to outstanding borrowings was 1.9% and $132.2 million of our accounts receivable was included in the Securitization Program.

Fair Value of Long-Term Debt
The estimated fair values and carrying amounts of long-term debt, excluding finance leases, were as follows:
March 31, 2022December 31, 2021
 (Thousands of Dollars)
Fair value$3,222,517 $3,459,153 
Carrying amount$3,115,915 $3,130,625 

We have estimated the fair value of our publicly traded notes based upon quoted prices in active markets; therefore, we determined that the fair value of our publicly traded notes falls in Level 1 of the fair value hierarchy. With regard to our other debt, for which a quoted market price is not available, we have estimated the fair value using a discounted cash flow analysis using current incremental borrowing rates for similar types of borrowing arrangements and determined that the fair value falls in Level 2 of the fair value hierarchy. The carrying amount includes net fair value adjustments, unamortized discounts and unamortized debt issuance costs.

11

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
6. COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES

We have contingent liabilities resulting from various litigation, claims and commitments. We record accruals for loss contingencies when losses are considered probable and can be reasonably estimated. Legal fees associated with defending the Partnership in legal matters are expensed as incurred. We accrued $0.9 million and $0.1 million for contingent losses as of March 31, 2022 and December 31, 2021, respectively. The amount that will ultimately be paid related to such matters may differ from the recorded accruals, and the timing of such payments is uncertain. We evaluate each contingent loss at least quarterly, and more frequently as each matter progresses and develops over time, and we do not believe that the resolution of any particular claim or proceeding, or all matters in the aggregate, would have a material adverse effect on our results of operations, financial position or liquidity.

COVID-19. Ongoing uncertainty surrounding the COVID-19 pandemic has caused and may continue to cause volatility and could have a significant impact on management’s estimates and assumptions in 2022 and beyond.

7. DERIVATIVES

We utilize various derivative instruments to manage our exposure to interest rate risk and commodity price risk. Our risk management policies and procedures are designed to monitor interest rates, futures and swap positions and over-the-counter positions, as well as physical commodity volumes, grades, locations and delivery schedules, to help ensure that our hedging activities address our market risks. Derivative financial instruments associated with commodity price risk with respect to our petroleum product inventories and related firm commitments to purchase and/or sell such inventories were not material for any periods presented.

We were a party to certain interest rate swap agreements to manage our exposure to changes in interest rates, which included forward-starting interest rate swap agreements that qualified as cash flow hedges prior to their termination. We reclassify the mark-to-market adjustments related to these cash flows hedges that were recorded in “Accumulated other comprehensive loss” (AOCI) into “Interest expense, net” as the underlying forecasted interest payments occur or if the interest payments are probable not to occur. We reclassified losses on cash flow hedges to “Interest expense, net” of $0.5 million and $1.3 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we expect to reclassify a loss of $2.1 million to “Interest expense, net” within the next twelve months associated with unwound forward-starting interest rate swaps.

8. SERIES D CUMULATIVE CONVERTIBLE PREFERRED UNITS

Distributions on the Series D Cumulative Convertible Preferred Units (Series D Preferred Units) are payable out of any legally available funds, accrue and are cumulative from the original issuance dates, and are payable on the 15th day (or next business day) of each of March, June, September and December, to holders of record on the first business day of each payment month. The number of Series D Preferred Units issued and outstanding as of March 31, 2022 and December 31, 2021 totaled 23,246,650. The distribution rates on the Series D Preferred Units are as follows: (i) 9.75%, or $57.6 million, per annum ($0.619 per unit per distribution period) for the first two years (beginning with the September 17, 2018 distribution); (ii) 10.75%, or $63.4 million, per annum ($0.682 per unit per distribution period) for years three through five; and (iii) the greater of 13.75%, or $81.1 million, per annum ($0.872 per unit per distribution period) or the distribution per common unit thereafter. While the Series D Preferred Units are outstanding, the Partnership will be prohibited from paying distributions on any junior securities, including the common units, unless full cumulative distributions on the Series D Preferred Units (and any parity securities) have been, or contemporaneously are being, paid or set aside for payment through the most recent Series D Preferred Unit distribution payment date. Any Series D Preferred Unit distributions in excess of $0.635 per unit may be paid, in the Partnership’s sole discretion, in additional Series D Preferred Units, with the remainder paid in cash.

In April 2022, our board of directors declared distributions of $0.682 per Series D Preferred Unit to be paid on June 15, 2022.

12

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
9. PARTNERS' EQUITY

Series A, B and C Preferred Units
We allocate net income to our 8.50% Series A, 7.625% Series B and 9.00% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (collectively, the Series A, B and C Preferred Units) equal to the amount of distributions earned during the period. Distributions on our Series A, B and C Preferred Units are payable out of any legally available funds, accrue and are cumulative from the original issuance dates, and are payable on the 15th day (or next business day) of each of March, June, September and December of each year to holders of record on the first business day of each payment month.

Distribution information for our Series B and C Preferred Units is as follows:
UnitsFixed Distribution Rate Per Unit Per QuarterFixed Distribution
Per Quarter
Date at Which Distribution
Rate Becomes Floating
Floating Annual Rate (as a Percentage of the $25.00 Liquidation Preference per Unit)
(Thousands of Dollars)
Series B Preferred Units$0.47657 $7,339 June 15, 2022
Three-month LIBOR plus 5.643%
Series C Preferred Units$0.56250 $3,881 December 15, 2022
Three-month LIBOR plus 6.88%

The distribution rate on our Series A Preferred Units converted from a fixed rate to a floating rate of the three-month LIBOR plus 6.766% on December 15, 2021. Distribution information for our Series A Preferred Units is as follows:
PeriodDistribution Rate per UnitTotal Distribution
(Thousands of Dollars)
March 15, 2022 - June 14, 2022$0.47817 $4,332 
December 15, 2021 - March 14, 2022$0.43606 $3,951 

In April 2022, our board of directors declared distributions with respect to the Series A, B and C Preferred Units to be paid on June 15, 2022.

Common Limited Partners
We make quarterly distributions to common unitholders of 100% of our “Available Cash,” generally defined as cash receipts less cash disbursements, including distributions to our preferred units, and cash reserves established by the general partner, in its sole discretion. These quarterly distributions are declared and paid within 45 days subsequent to each quarter-end. The common unitholders receive a distribution each quarter as determined by the board of directors, subject to limitation by the distributions in arrears, if any, on our preferred units. In April 2022, our board of directors declared distributions with respect to our common units for the quarter ended March 31, 2022.

The following table summarizes information about cash distributions to our common limited partners applicable to the period in which the distributions were earned:
Quarter EndedCash Distributions
Per Unit
Total Cash
Distributions
Record DatePayment Date
(Thousands of Dollars)
March 31, 2022$0.40 $44,165 May 9, 2022May 13, 2022
December 31, 2021$0.40 $44,008 February 8, 2022February 14, 2022

13

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Accumulated Other Comprehensive Income (Loss)
The balance of and changes in the components included in AOCI were as follows:
Three Months Ended March 31,
20222021
Foreign Currency TranslationCash Flow HedgesPension and Other Postretirement BenefitsTotalForeign Currency TranslationCash Flow HedgesPension and Other Postretirement BenefitsTotal
(Thousands of Dollars)
Balance as of January 1$(41,761)$(36,486)$4,269 $(73,978)$(42,362)$(42,150)$(12,144)$(96,656)
Other comprehensive income before reclassification adjustments829   829 957   957 
Net gain on pension costs reclassified into other income, net
  (420)(420)  (187)(187)
Net loss on cash flow hedges reclassified into interest expense, net
 529  529  1,348  1,348 
Other
  (6)(6)  2 2 
Other comprehensive income (loss)829 529 (426)932 957 1,348 (185)2,120 
Balance as of March 31$(40,932)$(35,957)$3,843 $(73,046)$(41,405)$(40,802)$(12,329)$(94,536)

10. NET INCOME (LOSS) PER COMMON UNIT

Basic net income (loss) per common unit is determined pursuant to the two-class method. Under this method, all earnings are allocated to our limited partners and participating securities based on their respective rights to receive distributions earned during the period. Participating securities include restricted units awarded under our long-term incentive plans. We compute basic net income (loss) per common unit by dividing net income (loss) attributable to common units by the weighted-average number of common units outstanding during the period.

We compute diluted net income (loss) per common unit by dividing net income (loss) attributable to common units by the sum of (i) the weighted average number of common units outstanding during the period and (ii) the effect of dilutive potential common units outstanding during the period. Dilutive potential common units may include the Series D Preferred Units and contingently issuable performance unit awards.

The Series D Preferred Units contain certain unitholder conversion and redemption features, and we use the if-converted method to calculate the dilutive effect of the conversion or redemption feature that is most advantageous to our Series D preferred unitholders. The effect of the assumed conversion or redemption of the Series D Preferred Units outstanding was antidilutive for each of the three months ended March 31, 2022 and 2021; therefore, we did not include such conversion in the computation of diluted net (loss) income per common unit.

Contingently issuable performance units are included as dilutive potential common units if it is probable that performance measures will be achieved, unless to do so would be antidilutive.
14

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The following table details the calculation of basic and diluted net (loss) income per common unit:
 Three Months Ended March 31,
 20222021
 (Thousands of Dollars, Except Unit and Per Unit Data)
Net income$12,312 $42,257 
Distributions to preferred limited partners
(31,092)(31,887)
Distributions to common limited partners(44,165)(43,834)
Distribution equivalent rights to restricted units(633)(598)
Distributions in excess of income$(63,578)$(34,062)
Distributions to common limited partners$44,165 $43,834 
Allocation of distributions in excess of income(63,578)(34,062)
Series D Preferred Unit accretion(4,581)(4,021)
Net (loss) income attributable to common units$(23,994)$5,751 
Basic and diluted weighted-average common units outstanding110,177,045 109,506,222 
Basic and diluted net (loss) income per common unit$(0.22)$0.05 

11. SUPPLEMENTAL CASH FLOW INFORMATION

Changes in current assets and current liabilities were as follows:
 Three Months Ended March 31,
 20222021
 (Thousands of Dollars)
Decrease (increase) in current assets:
Accounts receivable$(13,704)$12,232 
Inventories(3,062)(6,471)
Other current assets10,289 9,689 
Increase (decrease) in current liabilities:
Accounts payable4,284 5,067 
Accrued interest payable37,968 27,149 
Accrued liabilities(14,178)(19,082)
Taxes other than income tax(4,085)(4,187)
Changes in current assets and current liabilities$17,512 $24,397 

The above changes in current assets and current liabilities differ from changes between amounts reflected in the applicable consolidated balance sheets due to:
the change in the amount accrued for capital expenditures;
the effect of foreign currency translation;
the reclassification of certain assets and liabilities to “Assets held for sale” and “Liabilities held for sale” on the consolidated balance sheet (please refer to Note 3 for additional discussion); and
the effect of accrued compensation expense paid with fully vested common unit awards.

15

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Cash flows related to interest and income taxes were as follows:
 Three Months Ended March 31,
 20222021
 (Thousands of Dollars)
Cash paid for interest, net of amount capitalized$9,320 $24,737 
Cash paid for income taxes, net of tax refunds received$185 $554 

As of March 31, 2022 and December 31, 2021, restricted cash, representing legally restricted funds that are unavailable for general use, is included in "Other long-term assets, net" on the consolidated balance sheets. “Cash, cash equivalents and restricted cash” on the consolidated statements of cash flows is included in the consolidated balance sheets as follows:
March 31, 2022December 31, 2021
(Thousands of Dollars)
Cash and cash equivalents$8,398 $5,637 
Assets held for sale2,429  
Other long-term assets, net8,802 8,802 
Cash, cash equivalents and restricted cash$19,629 $14,439 

12. SEGMENT INFORMATION

Our reportable business segments consist of the pipeline, storage and fuels marketing segments. Our segments represent strategic business units that offer different services and products. We evaluate the performance of each segment based on its respective operating income, before general and administrative expenses and certain non-segmental depreciation and amortization expense. General and administrative expenses are not allocated to the operating segments since those expenses relate primarily to the overall management at the entity level.
Results of operations for the reportable segments were as follows:
 Three Months Ended March 31,
 20222021
 (Thousands of Dollars)
Revenues:
Pipeline$188,683 $169,228 
Storage87,921 108,574 
Fuels marketing133,260 83,855 
Consolidation and intersegment eliminations(1)(11)
Total revenues$409,863 $361,646 
Operating income (loss):
Pipeline$95,752 $79,379 
Storage(14,975)42,718 
Fuels marketing6,544 2,731 
Total segment operating income87,321 124,828 
General and administrative expenses27,071 24,492 
Other depreciation and amortization expense1,824 2,047 
Total operating income$58,426 $98,289 

16

NUSTAR ENERGY L.P. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Total assets by reportable segment were as follows:
March 31, 2022December 31, 2021
 (Thousands of Dollars)
Pipeline$3,405,703 $3,441,272 
Storage1,518,082 1,537,037 
Fuels marketing66,006 41,562 
Total segment assets4,989,791 5,019,871 
Other partnership assets140,134 136,461 
Total consolidated assets$5,129,925 $5,156,332 
 
17

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise indicated, the terms “NuStar Energy,” “NS,” “the Partnership,” “we,” “our” and “us” are used in this report to refer to NuStar Energy L.P., to one or more of our consolidated subsidiaries or to all of them taken as a whole.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
In this Form 10-Q, we make certain forward-looking statements, such as statements regarding our plans, strategies, objectives, expectations, estimates, predictions, projections, assumptions, intentions, resources and the future impact of the coronavirus, or COVID-19, the responses thereto, the Russia-Ukraine conflict, economic activity and the actions by oil producing nations on our business. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. These forward-looking statements can generally be identified by the words “anticipates,” “believes,” “expects,” “plans,” “intends,” “estimates,” “forecasts,” “budgets,” “projects,” “will,” “could,” “should,” “may” and similar expressions. These statements reflect our current views with regard to future events and are subject to various risks, uncertainties and assumptions, which may cause actual results to differ materially. Please read Item 1A. “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2021, as well as additional information provided from time to time in our subsequent filings with the Securities and Exchange Commission, for a discussion of certain of those risks, uncertainties and assumptions.

If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those described in any forward-looking statement. Other unknown or unpredictable factors could also have material adverse effects on our future results. Readers are cautioned not to place undue reliance on this forward-looking information, which is as of the date of this Form 10-Q. We do not intend to update these statements unless we are required by the securities laws to do so, and we undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented in five sections:
Overview, including Trends and Outlook
Results of Operations
Liquidity and Capital Resources
Critical Accounting Policies
New Accounting Pronouncements

OVERVIEW
NuStar Energy L.P. (NYSE: NS) is primarily engaged in the transportation, terminalling and storage of petroleum products and renewable fuels and the transportation of anhydrous ammonia. Our business is managed under the direction of the board of directors of NuStar GP, LLC, the general partner of our general partner, Riverwalk Logistics, L.P., both of which are indirectly wholly owned subsidiaries of ours.

Our operations consist of three reportable business segments: pipeline, storage and fuels marketing. As of March 31, 2022, our assets included 9,940 miles of pipeline and 64 terminal and storage facilities, which provided approximately 57 million barrels of storage capacity. As described below, on April 29, 2022 we sold our Point Tupper terminal facility with a storage capacity of 7.8 million barrels. We conduct our operations through our subsidiaries, primarily NuStar Logistics, L.P. (NuStar Logistics) and NuStar Pipeline Operating Partnership L.P. (NuPOP). We generate revenue primarily from:
tariffs for transportation through our pipelines;
fees for the use of our terminal and storage facilities and related ancillary services; and
sales of petroleum products.

The following factors affect the results of our operations:
economic factors and price volatility;
industry factors, such as changes in the prices of petroleum products that affect demand or production, or regulatory changes that could increase costs or impose restrictions on operations;
factors that affect our customers and the markets they serve, such as utilization rates and maintenance turnaround schedules of our refining company customers and drilling activity by our crude oil production customers;
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company-specific factors, such as facility integrity issues, maintenance requirements and outages that impact the throughput rates of our assets; and
seasonal factors that affect the demand for products transported by and/or stored in our assets and the demand for products we sell.

Recent Developments
Sale of Point Tupper Terminal. On April 29, 2022, we sold the equity interests in our wholly owned subsidiaries that own our Point Tupper terminal facility (the Point Tupper Terminal Operations) to EverWind Fuels for $60.0 million, plus working capital, which is subject to adjustment. The terminal facility has a storage capacity of 7.8 million barrels and has been included in the storage segment. We recognized a non-cash pre-tax impairment loss of $46.1 million in the first quarter of 2022 and expect to utilize the sales proceeds to reduce debt and thereby improve our debt metrics. Please refer to Note 3 of the Condensed Notes to Consolidated Financial Statements in Item 1. “Financial Statements” for additional information.

Debt Amendments. On January 28, 2022, we amended and restated our $1.0 billion unsecured revolving credit agreement to extend the maturity to April 27, 2025, replace the LIBOR-based interest rate and modify other terms. Also on January 28, 2022, we amended our $100.0 million receivables financing agreement to extend the scheduled termination date to January 31, 2025, replace the LIBOR-based interest rate and modify other terms.

Other Events
Eastern U.S. Terminals Disposition. On October 8, 2021, we completed the sale of nine U.S. terminal and storage facilities, including all our North East Terminals and one terminal in Florida (the Eastern U.S. Terminal Operations) to Sunoco LP for $250.0 million in cash (the Eastern U.S. Terminals Disposition). The terminals had an aggregate storage capacity of 14.8 million barrels and were included in the storage segment. We utilized the proceeds from the sale to reduce debt and improve our debt metrics.

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Trends and Outlook
While 2022 marks the third year of the COVID-19 pandemic in the U.S., we continue to see signs of stabilization and improvement, across the U.S. and in NuStar’s footprint. U.S. refined product demand outlook has seen some sustained improvement, as COVID-19 vaccinations have continued to allow more people go about normal day-to-day activities and traveling. However, variants may emerge that could significantly increase COVID-19 case counts, which may further impact the overall demand recovery in 2022.

Since Russia’s military invasion of Ukraine in late February 2022, prices for a number of the commodities produced in those countries, including oil and gas, rose sharply and have been volatile, on market concerns about worldwide supply constraints. The long-term impact of the ongoing Russia-Ukraine conflict, along with the lingering impact of COVID-19, on the global and U.S. economy remains uncertain; however, at this time, we do not expect a significant impact to our operations or financial position.

Although U.S. oil production has been slow to respond to the recent increase in crude oil prices due to a variety of factors, including supply chain challenges, we expect sustained healthy U.S. shale production growth in 2022 from improving global demand as well as supply constraints from the Russia-Ukraine conflict. We expect our Permian system volumes to see healthy growth in 2022. Refined product demand on NuStar’s pipeline systems rebounded in 2021 to pre-pandemic levels or higher, and we expect our refined products pipeline systems to perform at or above 100% of our pre-pandemic levels through 2022; however, if prices for motor fuels continue to rise and remain at those levels for a sustained period, consumer demand could fall, which would reduce demand for the transportation and storage services we provide. So far this year, the sustained recovery in refined product demand has increased U.S. refiners’ utilization and demand for crude oil, which has contributed to increased throughputs on certain of our crude oil pipelines, which we expect to continue through 2022. In addition, we continue to expect to benefit from the growth of our renewable fuels distribution system on the West Coast, where we expect to provide an increasing share of California’s renewable fuels as we complete our planned tank conversion projects.

The lingering impact of the COVID-19 pandemic continues to ripple through the U.S. economy, notably in the form of rising inflation and supply chain issues, which affected certain industries and geographic areas to varying degrees during 2021; the Russia-Ukraine conflict seems to have only amplified inflation and supply chain constraints so far in 2022. The U.S. Federal Reserve has raised interest rates and is expected to implement several more increases in 2022, which will increase the cost of our variable-rate debt. In addition, the distribution rates of our Series A, B and C Preferred Units have converted, or will convert in 2022, from fixed rates to floating rates that increase or decrease with prevailing interest rates. On the other hand, our ability to pass along rate increases reflecting changes in producer and/or consumer price indices to our customers, under our tariffs and contracts, should counterbalance the impact of inflation on our costs. We plan to continue to manage our operations with fiscal discipline and to evaluate our capital expenditures as we remain committed to improving our debt metrics and strengthening our balance sheet. We expect to continue to fund all of our expenses, distribution requirements and capital expenditures for the full-year 2022 using internally generated cash flows.

Our outlook for the partnership, both overall and for any of our segments, may change, as we base our expectations on our continuing evaluation of several factors, many of which are outside our control. These factors include, but are not limited to, uncertainty surrounding the COVID-19 pandemic and the Russia-Ukraine conflict; uncertainty surrounding future production decisions by the Organization of Petroleum Exporting Countries and other oil-producing nations (OPEC+); the state of the economy and the capital markets; changes to our customers’ refinery maintenance schedules and unplanned refinery downtime; crude oil prices; the supply of and demand for petroleum products, renewable fuels and anhydrous ammonia; demand for our transportation and storage services; the availability and costs of personnel, equipment, supplies and services essential to our operations; the ability to obtain timely permitting approvals; and changes in laws and regulations affecting our operations.


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RESULTS OF OPERATIONS
Consolidated Results of Operations

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
 Three Months Ended March 31,Change
 20222021
(Unaudited, Thousands of Dollars, Except Per Unit Data)
Statement of Income Data:
Revenues:
Service revenues$265,305 $271,883 $(6,578)
Product sales144,558 89,763 54,795 
Total revenues409,863 361,646 48,217 
Costs and expenses:
Costs associated with service revenues149,705 155,705 (6,000)
Costs associated with product sales126,715 81,113 45,602 
Impairment loss46,122 — 46,122 
General and administrative expenses27,071 24,492 2,579 
Other depreciation and amortization expense1,824 2,047 (223)
Total costs and expenses351,437 263,357 88,080 
Operating income58,426 98,289 (39,863)
Interest expense, net(49,818)(54,918)5,100 
Other income, net3,671 398 3,273 
Income before income tax (benefit) expense12,279 43,769 (31,490)
Income tax (benefit) expense(33)1,512 (1,545)
Net income$12,312 $42,257 $(29,945)
Basic and diluted net (loss) income per common unit$(0.22)$0.05 $(0.27)

Consolidated Overview. Net income decreased $29.9 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, mainly due to a non-cash pre-tax impairment loss of $46.1 million recorded in the first quarter of 2022 related to our Point Tupper Terminal Operations and lower operating income from our storage segment, excluding the impairment loss. These decreases were partially offset by higher operating income from our pipeline segment.

Corporate Items. General and administrative expenses increased $2.6 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, mainly due to higher compensation costs.

Interest expense, net, decreased $5.1 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to lower overall debt balances following the repayment of outstanding debt, partially with the proceeds from October 2021 and December 2020 asset sales.

Other income, net increased $3.3 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to foreign exchange rate fluctuations.

Pipeline Segment
As of March 31, 2022, our pipeline assets consist of 9,940 miles of pipeline with 33 terminals and 13.0 million barrels of storage capacity. Our Central West System includes 3,205 miles of refined product pipelines and 2,235 miles of crude oil pipelines. In addition, our Central East System includes 2,500 miles of refined product pipelines, consisting of the East and North Pipelines, and a 2,000-mile ammonia pipeline (the Ammonia Pipeline). We charge tariffs on a per barrel basis for transportation in our refined product and crude oil pipelines and on a per ton basis for transportation in the Ammonia Pipeline. Other revenues include product sales of surplus pipeline loss allowance (PLA) volumes.

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Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
 Three Months Ended March 31,Change
 20222021
Pipeline Segment:
(Thousands of Dollars, Except Barrels/Day Information)
Crude oil pipelines throughput (barrels/day)1,309,085 1,101,327 207,758 
Refined products and ammonia pipelines throughput (barrels/day)563,248 508,726 54,522 
Total throughput (barrels/day)1,872,333 1,610,053 262,280 
Throughput and other revenues$188,683 $169,228 $19,455 
Operating expenses48,103 45,055 3,048 
Depreciation and amortization expense44,828 44,794 34 
Segment operating income$95,752