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Actionable news in NSH: NUSTAR GP HOLDINGS LLC,

SECURITIES AND EXCHANGE COMMISSION

Delaware85-0470977
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
19003 IH-10 West
San Antonio, Texas
78257
(Address of principal executive offices)(Zip Code)
PART I – FINANCIAL INFORMATION
Item 1.Financial Statements:
Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 3
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2017 and 2016 4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016 5
Condensed Notes to Consolidated Financial Statements 6
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
Item 3.Quantitative and Qualitative Disclosures About Market Risk 21
Item 4.Controls and Procedures 21
PART II – OTHER INFORMATION
Item 5.Other Information 22
Item 6.Exhibits 22
SIGNATURES 23
September 30,
2017
December 31,
2016
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$218
$207
Income tax receivable303
303
Prepaid expenses and other current assets282
292
Total current assets803
802
Investment in NuStar Energy L.P.293,519
268,742
Deferred income tax assets, net5,283
5,086
Total assets$299,605
$274,630
Liabilities and Members’ Equity
Current liabilities:
Short-term debt$42,500
$30,000
Payable to related party81
317
Accounts payable2
1
Accrued liabilities361
460
Taxes other than income tax71
64
Total current liabilities43,015
30,842
Commitments and contingencies (Note 8)

Members’ equity (42,951,749 common units outstandingas of September 30, 2017 and December 31, 2016)267,230
257,662
Accumulated other comprehensive loss(10,640)(13,874)
Total members’ equity256,590
243,788
Total liabilities and members’ equity$299,605
$274,630
Three Months Ended September 30,Nine Months Ended September 30,
2017201620172016
Equity in earnings of NuStar Energy L.P.$12,177
$16,130
$41,252
$49,425
General and administrative expenses:
Third parties(660)(454)(1,860)(1,794)
Related party(242)(250)(725)(583)
Total general and administrative expenses(902)(704)(2,585)(2,377)
Other income, net
2,142
41,603
2,755
Interest expense, net(448)(276)(1,134)(789)
Income before income tax benefit 10,827
17,292
79,136
49,014
Income tax benefit203
28
197
55
Net income$11,030
$17,320
$79,333
$49,069
Net income per unit$0.26
$0.40
$1.84
$1.14
Weighted-average number of common units outstanding42,951,749
42,931,242
42,951,749
42,930,951
Comprehensive income$11,782
$17,076
$82,567
$38,641
Nine Months Ended September 30,
20172016
Cash Flows from Operating Activities:
Net income$79,333
$49,069
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of NuStar Energy L.P.(41,252)(49,425)
Distributions of equity in earnings from NuStar Energy L.P.41,252
49,425
Gain related to NuStar Energy L.P.’s issuance of common limited partner units(41,603)(2,142)
Gain on sale of NuStar Energy L.P. common limited partner units in connection with unit-based compensation
(613)
Unit-based compensation expense615
460
Amortization of deferred debt costs134
126
Deferred income tax benefit(197)(63)
Changes in current assets and liabilities (Note 6)(286)(3,532)
Increase in long-term receivable from related party
(899)
Increase in long-term liabilities
1,183
Net cash provided by operating activities37,996
43,589
Cash Flows from Investing Activities:
Distributions in excess of equity in earnings from NuStar Energy L.P.33,658
22,431
Investment in NuStar Energy L.P.(13,597)(737)
Proceeds from sale of NuStar Energy L.P. common units in connectionwith unit-based compensation
1,319
Net cash provided by investing activities20,061
23,013
Cash Flows from Financing Activities:
Proceeds from short-term debt borrowings15,500
4,000
Repayment of short-term debt(3,000)
Distributions to unitholders(70,225)(70,192)
Other, net(321)(84)
Net cash used in financing activities(58,046)(66,276)
Net increase in cash and cash equivalents11
326
Cash and cash equivalents as of the beginning of the period207
34
Cash and cash equivalents as of the end of the period$218
$360
100% of the incentive distribution rights (IDRs) issued by NuStar Energy, which entitle us to receive increasing percentages of the cash distributed by NuStar Energy, currently at the maximum percentage of 23%; and
September 30,
2017
December 31,
2016
(Thousands of Dollars)
Balance Sheet Information:
Current assets$233,872
$377,183
Property, plant and equipment, net4,188,149
3,722,283
Goodwill1,095,943
696,637
Intangible assets, net797,339
127,083
Other non-current assets103,465
107,359
Total assets$6,418,768
$5,030,545
Current liabilities$641,067
$289,396
Long-term debt, net of current portion3,232,599
3,014,364
Other non-current liabilities125,240
115,168
Total liabilities3,998,906
3,418,928
NuStar Energy partners’ equity2,419,862
1,611,617
Total liabilities and partners’ equity$6,418,768
$5,030,545
Three Months Ended September 30,Nine Months Ended September 30,
2017201620172016
(Thousands of Dollars)
Statement of Comprehensive Income Information:
Revenues$440,566
$441,418
$1,363,484
$1,284,925
Operating income$91,717
$87,954
$262,260
$273,736
Net income$38,592
$51,141
$122,782
$161,059
September 30,
2017
December 31,
2016
(Thousands of Dollars)
NuStar Energy’s partners’ equity$2,419,862
$1,611,617
Less NuStar Energy’s preferred limited partners’ equity589,920
218,400
NuStar Energy’s partners’ equity, excluding preferred limited partners’ equity1,829,942
1,393,217
NuStar GP Holdings’ ownership interest in NuStar Energy12.8%14.7%
NuStar GP Holdings’ share of NuStar Energy’s partners’ equity234,233
204,803
Step-up in basis related to NuStar Energy’s assets and liabilities, including equity method goodwill, and other59,286
63,939
Investment in NuStar Energy$293,519
$268,742
Three Months Ended September 30,Nine Months Ended September 30,
2017201620172016
(Thousands of Dollars, Except Per Unit Data)
General partner interest$2,302
$1,976
$6,947
$5,898
General partner IDRs10,912
10,890
34,736
32,500
Total general partner distribution13,214
12,866
41,683
38,398
Common limited partner distribution11,185
11,185
33,555
33,514
Total distributions to NuStar GP Holdings24,399
24,051
75,238
71,912
Public common limited partners’ distribution90,685
74,758
272,097
222,999
Total cash distributions$115,084
$98,809
$347,335
$294,911
Cash distributions per unit applicable to common limited partners$1.095
$1.095
$3.285
$3.285
Quarter EndedCash Distributions Per Common UnitTotal Cash DistributionsRecord DatePayment Date
(Thousands of Dollars)
September 30, 2017 (a)$1.095
$115,084
November 9, 2017November 14, 2017
June 30, 2017$1.095
$115,083
August 7, 2017August 11, 2017
March 31, 2017$1.095
$117,168
May 8, 2017May 12, 2017
December 31, 2016$1.095
$98,971
February 8, 2017February 13, 2017
Nine Months Ended September 30,
20172016
(Thousands of Dollars)
Decrease (increase) in current assets:
Receivable from related party, net$
$(1,227)
Income tax receivable
909
Other receivables
(32)
Prepaid expenses and other current assets41
(21)
Increase (decrease) in current liabilities:
Payable to related party(236)
Accounts payable1
(221)
Accrued compensation expense
(1,339)
Accrued liabilities(99)11
Taxes other than income tax7
(1,612)
Changes in current assets and current liabilities$(286)$(3,532)
Nine Months Ended September 30,
20172016
(Thousands of Dollars)
Cash paid for interest$990
$655
Cash refunded for income tax$
$(900)
Balance as of January 1, 2017$243,788
Net income79,333
Distributions to unitholders(70,225)
Share of NuStar Energy’s other comprehensive income3,234
Unit-based compensation460
Balance as of September 30, 2017$256,590
Three Months Ended September 30,Nine Months Ended September 30,
2017201620172016
(Thousands of Dollars, Except Per Unit Data)
Cash distributions per unit$0.545
$0.545
$1.635
$1.635
Total cash distributions$23,409
$23,398
$70,226
$70,193
Quarter EndedCash Distributions Per UnitTotal Cash DistributionsRecord DatePayment Date
(Thousands of Dollars)
September 30, 2017 (a)$0.545
$23,409
November 9, 2017November 16, 2017
June 30, 2017 $0.545
$23,408
August 7, 2017August 15, 2017
March 31, 2017$0.545
$23,409
May 8, 2017May 16, 2017
December 31, 2016$0.545
$23,408
February 8, 2017February 15, 2017
100% of the incentive distribution rights (IDRs) issued by NuStar Energy, which entitle us to receive increasing percentages of the cash distributed by NuStar Energy, currently at the maximum percentage of 23%; and

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