Slides from presentation to be used on April 8 and 9, 2009.

This presentation contains certain estimates, predictions, projections, assumptions and

other forward-looking statements that involve various risks and uncertainties.

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

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

various

risks,

uncertainties

and

assumptions.

For

discussion

certain

those

risks,

please

read

"Risk

Factors"

Item

both

NuStar

Energy

L.P's

and

NuStar

Holdings,

LLC's

respective

annual

reports

Form

10-K

for

the

year ended December 31, 2008 and each entity’s subsequent quarterly reports as filed

with the Securities and Exchange Commission.

Forward Looking Statements

NuStar Energy L.P. is a leading publicly

traded growth-oriented partnership (NYSE:

NS) with a market capitalization of

approximately $2.6 billion and an enterprise

value of approximately $4.5 billion

One of the largest independent petroleum

pipeline and terminal operators in the U.S.

and one of the largest asphalt refiners and

marketers in the U.S.

Has delivered record performances since its

IPO in 2001

Expect to be ranked on the Fortune 500

Listing for the first time ever based on 2008

results

NuStar GP Holdings, LLC (NYSE: NSH)

holds the 2% general partner interest and

incentive distribution rights

NuStar Overview

NSH

IPO Date:

4/16/2001

7/19/2006

Unit Price (4/6/09):

$48.00

$21.17

Annual Distribution/Unit:

$4.23

$1.72

Yield (4/6/09):

8.81%

8.12%

Market Equity Capitalization:

$2,614 million

$901 million

Enterprise Value:

$4,464 million

$905 million

Total Assets (12/31/08):

$4,460 million

$573 million

Debt/Capitalization (12/31/08):

46.2%

n/a

83.2%

Membership Interest

79.6%

L.P. Interest

Public Unitholders

35,409,951 NSH Units

Public Unitholders

44,218,943 NS Units

16.8%

Membership Interest

2.0% G.P. Interest

18.4% L.P. Interest

Incentive Distribution Rights

William E. Greehey

7,138,920 NSH Units

NYSE: NSH

NYSE: NS

High quality, large and diverse asset footprint with

operations in eight different countries including the

U.S., Mexico, Netherlands, Netherland Antilles (i.e.

Caribbean), England, Ireland, Scotland and Canada

Third largest independent liquids terminal operator in

the world and second largest in the U.S. that

provides significant growth opportunities

No. 1 asphalt supplier in the U.S. market and No. 3

asphalt production capacity in the U.S.

Expect asphalt operations to provide further upside to

financial results as asphalt markets continue to tighten

What Sets NuStar Apart from its Peers

Investment grade credit rating with demonstrated access to capital markets in difficult conditions

Do not anticipate need to access capital markets in 2009 except for accretive acquisitions

Lower cost of capital

Top Incentive Distribution Rights (IDRs) capped at 25% vs. 50% for most MLPs

Strong corporate culture of taking care of employees, making safety a top priority, achieving

operational excellence and contributing time and money to our communities

Recognized in 2008 as one of the best places to work for in America and for our strong safety record

Experienced and proven management team with substantial equity ownership and industry

experience

37%

35%

28%

Percent of 2008 Segment Operating

Income

Diversification of operations provides various earnings streams and reduces risk

Approximately 72% of NuStar Energy’s segment operating income in 2008 resulted from

stable, fee-based operations

Remainder of segment operating income related to margin-based asphalt and fuels

marketing segment

Storage (~37%)

Transportation (~35%)

Refined Product Terminals

Crude Oil Storage

Refined Product Pipelines

Crude Oil Pipelines

Asphalt & Fuels Marketing (~28%)

Asphalt

Fuels Marketing

Product Supply, Wholesale and Fuel Oil Marketing

Bunkering/Other

Diversified Operations

$68

$86

$102

$154

$214

$221

$319

2002

2003

2004

2005

2006

2007

2008

Distributable Cash Flow ($ in Millions)

EBITDA ($ in Millions)

Record Growth Every Year,

Has Translated Into…

$77

$112

$133

$219

$322

$353

$492

2002

2003

2004

2005

2006

2007

2008

was

record

year

financially

primarily

due

contribution

from

asphalt

operations

and

growth projects

Despite a weaker economy, expect 2009 to be another record year for NuStar due to higher

results from all three of our business segments: Transportation, Storage and Asphalt and

Fuels Marketing

Continue to expect first quarter 2009 earnings to be in the range of 25 to 50 cents per unit

Note: 2005

and

2006

distributable

cash

flow

and

EBITDA

are

from

continuing

operations

…Consistent Distribution Growth While Maintaining a

Solid Distribution Coverage Ratio

$4.085

$3.835

$3.60

$3.365

$3.20

$2.95

$2.75

$2.40

2001

2002

2003

2004

2005

2006

2007

2008

NS Annual Distribution Since IPO

* Based on NS annualized distribution of $0.60 per unit in 2001

** Based on NSH annualized distribution of $0.32 per unit in 2006

NSH Annual Distribution Since IPO

$1.28

$1.38

$1.58

2006

2007

2008

~8.0% CAGR

~11% CAGR

NS Distribution Coverage Applicable to LPs

Targeting distribution increases at NS and NSH in

2009 –

increases dependent on NuStar Energy

L.P.’s performance, growth opportunities and global

economic, financial and capital market conditions

1.20x

1.25x

1.28x

1.30x

1.19x

1.16x

1.10x

1.33

2001

2002

2003

2004

2005

2006

2007

2008

NuStar Companies Beating Peers

and Market Indices

NS 3%

S&P 500 (37)%

AMZ Index (26)%

NSH Peers (25)%

NSH (13)%

Total

Return

Last

Twelve

Months

(LTM)

Despite

the

market

turmoil,

both

NuStar

companies

have

weathered

the

storm

well,

significantly

beating

their respective peer groups and market indices

Outperformance suggests bullish view on asphalt business, solid 2009 outlook and defensive nature of

business

Source: Barclay’s Capital

Note: NSH GP Peers Total Return Index is weighted on market capitalization of each company and includes the following companies: AHD, AHGP, BGH, EPE,

ETE, HPGP, MGG, and NRGP.

-60%

-50%

-40%

-30%

-20%

-10%

10%

4/4/08

6/4/08

8/4/08

10/4/08

12/4/08

2/3/09

4/6/09

2009 Outlook –

Transportation Segment

Slightly lower volumes but a tariff increase of around

7.5% effective July 1, 2009 should contribute higher

operating income in 2009 over 2008

Despite a weak economy, expect transportation

pipeline volumes to be only slightly lower in 2009

versus 2008

New pipeline business, an anticipated reduced refinery

maintenance schedule and a new pipeline project

expected to start-up in July should help NuStar achieve

these volumes in 2009

NuStar is more insulated from weaker demand compared

to other refined product pipelines

Benefit from market areas that are more

agricultural versus population center based

Although not included in the current forecast, a gradual recovery in refined product demand by the second

half of 2009 due to a combination of lower fuels prices, stabilizing economy and stimulus initiatives could

result in higher throughputs

Heavy planned refinery maintenance, primarily at the Valero Energy refineries we serve, and poor

weather negatively impacted first quarter 2009 pipeline volumes

Expect a much lighter planned maintenance schedule for the remainder of the year

NuStar’s 2008 Pipeline Receipts by Commodity

Other*

68%

Gasoline

32%

* Other includes crude oil, fuel oil, ammonia, jet fuel,

propane, naphtha and light refined product ends

2009 Outlook –

Storage Segment

Storage segment should also see better results in 2009 as

we benefit from a full year’s contribution primarily from the

projects completed under our $400 million construction

program, or an incremental $22 million of operating

income

Lower throughputs in our storage segment, primarily due

to heavy planned refinery maintenance at Valero Energy

refineries we serve, should not have a material impact to

our results

Approximately 90% of our revenues in the storage segment

come from leased assets or assets connected to pipelines in

our transportation segment

Expect to benefit from contango markets to the extent that

certain of our storage contract revenues are up for

renewal:

Contract renewals:

29% -

1 Year or Less

28% -

1 to 3 Years

23% -

3 to 5 Years

19% -

Greater than 5 Years

2009 Outlook –

Asphalt Operations

Continue to expect the 2009 EBITDA contribution from

asphalt operations to be in the same range previously

communicated in the fourth quarter 2008 earnings

conference call

Expect a higher margin per barrel and slightly higher sales

volumes assuming the impact from the stimulus package

kicks in by late 2009

Continue to target a 50 percent holdback of cash flows

from the asphalt business

PDVSA crude oil cuts not expected to have a material

impact to NuStar Energy L.P.’s financial results in 2009

Currently receiving full contract volumes and have

received no indication of further cuts

-5.0

5.0

15.0

25.0

35.0

45.0

55.0

2004

2005

2006

2007

2008

Imports

Exports

Net Imports

Despite lower asphalt demand, a combination of higher crude oil prices and tight asphalt supply resulted in

historic asphalt prices and margins in 2008

New

Jersey

asphalt

prices

climbed

from

around

$350

per

short

ton

the

start

the

season

over

$800

per

short

ton

during the peak asphalt season

Lack

asphalt

imports

was

one

the

main

contributing

factors

why

asphalt

supply

was

tight

2008

Venezuela

has

not

exported

any

asphalt

the

U.S.

since

January

2008

U.S. asphalt inventories at the end of January 2009 were 3% lower than the five-year average setting up for

tight supply in 2009

U.S. Asphalt Inventories (000 barrels)

Source of data for graphs: New Jersey Department of Transportation and U.S. Energy Information Administration

Tight Asphalt Fundamentals in 2008 Bode

Well for 2009

U.S. Asphalt Imports/Exports (mbpd)

10,000

20,000

30,000

40,000

50,000

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

2006

2007

2008

2009

5-Year Avg.

One of the driving factors for tighter asphalt supply in

2009 should be continuing low refinery utilization rates as

a result of recent macroeconomic weakness and resulting

lower refining margins

Increased ethanol blending and imports of gasoline and diesel

also result in lower refinery utilization, lower crude inputs and

less asphalt production

Continue to expect lack of asphalt imports to also be a

contributing factor to tighter supply in 2009

While a lower GDP forecast is expected to soften asphalt

demand, stimulus spending should help mitigate the

impact

Unlike 2008, lower crude oil and lower asphalt prices should

limit demand destruction in 2009

An improving economy should result in increased asphalt

demand

Foreign stimulus efforts also expected to support global

asphalt demand

Downward pressure in the asphalt price in 1Q09 is

primarily the result of lower crude oil prices, seasonally

poor weather and lack of winter-fill demand from large

asphalt storage company who has exited the business

Expect to see the asphalt price respond to the tight

supply/demand balance as weather improves and the asphalt

season kicks off

Source of data for graphs: U.S. Energy Information Administration and New Jersey Department of Transportation

Expect Low Refinery Utilization Rates to Tighten

Asphalt Markets Even More in 2009 and Beyond

NJ Asphalt Cement Price Index

($ per short ton)

U.S. Refinery Utilization Rate vs. U.S. Asphalt Production

$100

$200

$300

$400

$500

$600

$700

$800

$900

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2006

2007

2008

2009

5-Year Avg.

75.0%

80.0%

85.0%

90.0%

95.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

250

300

350

400

450

500

550

Refinery Utilization (%)

Asphalt Production (MBPD)

$10.00

$30.00

$50.00

$70.00

$90.00

$110.00

$130.00

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Lower Availability of Heavier, Sour Crudes Expected

to Drive Less Asphalt Production Near-Term

Comparative Crude Oil Prices ($ per barrel)

Spread b/w WTI and

Venezuelan crudes

currently around $5 to

$15 per barrel.

Differentials between light, sweet and heavy, sour crudes have recently narrowed due to OPEC cuts

of heavier, sour barrels and WTI price weakness

NuStar is still seeing good discounts for the Venezuela crudes that are being purchased

Near-term, lower availability of heavier, sour crudes expected to result in less bottoms being

produced, including asphalt

While we expect differentials to remain narrow in the near-term, should see the differentials widen as

the economy and demand for refined products improve

WTI *

Mexican Maya *

BCF-13 **

Boscan **

* Source: Platts

** Source: Company

Announced U.S. Coker Projects:

Longer Term Asphalt Story

Continues to be Bullish

Source: PIRA Refinery Database; Company Information

Impact of coker projects on asphalt supply still intact despite some projects delays/cancellations

85% of the announced coker projects listed are either complete or have a high likelihood of completion (i.e. firm projects -

expansions that are expected to have a very high likelihood of occurring)

Combination of low refinery utilization rates, improving economy, lack of imports and coker projects coming on-

line should result in tighter asphalt markets and better-than-historic asphalt prices and margins over the next

several years

No.

Refinery

PADD

Announced Coker

Capacity (Mbpd)

Announced

Crude Capacity

(Mbpd)

Start Up

Date

Status

Coffeyville Resources - Coffeyville, Kansas

2.0

8.0

1Q 2007

Complete

BP - Toledo, Ohio

2.0

10.0

1Q 2007

Complete

Valero - Port Arthur, Texas

III

25.0

75.0

1Q 2007

Complete

Frontier - Cheyenne, Wyoming

4.3

3Q 2007

Complete

Chevron - El Segundo, California

15.0

4Q 2007

Complete

Sinclair – Sinclair, Wyoming

20.0

11.0

4Q 2007

Complete

ConocoPhillips - Borger, Texas

III

25.0

4Q 2007

Complete

Cenex - Laurel, Montana

15.0

1Q 2008

Complete

Frontier - El Dorado, Kansas

3.0

11.0

2Q 2008

Complete

Tesoro - Martinez, California

4.4

2Q 2008

Complete

ConocoPhillips - Los Angeles, California

5.0

4Q 2008

Firm

Marathon - Garyville, Louisiana

III

44.0

180.0

4Q 2009

Firm

Valero - St. Charles, Lousiana

III

10.0

45.0

1Q 2010

Firm

Hunt - Tuscaloosa, Alabama

III

18.5

15.0

3Q 2010

Firm

ConocoPhillips - Wood River, Illinois

65.0

55.0

1Q 2011

Firm

Atofina Petrochemicals Inc.- Port Arthur, Texas

III

50.0

1Q 2011

Firm

BP/Husky - Toledo, Ohio

25.0

1Q 2011

Firm

Pasadena Refining System - Pasadena, Texas

III

29.0

100.0

2Q 2011

Probable

BP - Whiting, Indiana

95.0

30.0

1Q 2012

Firm

Motiva - Port Arthur, Texas

III

40.0

325.0

1Q 2012

Firm

ConocoPhillips - Borger, Texas

III

20.0

34.0

2Q 2012

Probable

Marathon - Detroit, Michigan

28.0

13.0

2Q 2012

Probable

Total US Expansion

545.2

912.0

Status of U.S. Highway Funding

Stimulus Package Expected to Benefit Asphalt Demand

* Source: Proposed funding based on media reports and internal estimates

Actual and Proposed Federal Highway Funding ($ in billions)*

$37.1

$38.1

$40.4

$41.8

$49.3

Stimulus Funds

SAFETEA-LU

$66.6

$70.8

$75.0

$77.0

$78.0

New SAFETEA-LU funding for FY2010-2014 estimated at $300-500 Billion, a 75% increase over the current bill*

Congress

already

considering

reauthorization

funding

early

2009

Funding options include federal gas tax increase, indexing user fees for inflation adjustment, bonds and tolls

The American Recovery and Revitalization Act provides $29 billion for transportation infrastructure investments

$27.5 billion for highways and an additional $1.5 billion for discretionary surface transportation projects

Expect

approximately

percent

the

$29

billion

funding

towards

asphalt

with

the

remainder

concrete

Need to quickly implement projects favors maintenance vs. new builds, increasing asphalt consumed per dollar spent

50% of the $27.5 billion allocated for highway spending must be obligated to projects within 120 days of enactment otherwise those

funds will be sent back to the government for redistribution

Each

state’s

governor

must

certify

the

state

will

use

funds

addition

to,

and

not

replace,

state

funding

transportation

projects

Federal government just recently released funds to states on March 3, 2009, which were apportioned to states based on the

SAFETEA-LU

highway

formula

–

Expect

start

seeing

impact

from

stimulus

funds

the

third

quarter

2009

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Current Revolver Availability

Rate on revolver based on LIBOR plus 50 bps,

currently around 1.10%

Financial Covenant Tests:

Debt-to-EBITDA cannot exceed 5.0 to 1.0 times

Following an acquisition of $100 million or

more, NuStar may increase Debt-to-EBITDA to

5.5 times for two consecutive quarters

Capital Access / Key Debt Terms &

Covenants

Do not anticipate need to access capital markets to

fund current operations, distributions and capital

requirements in 2009

Expect to use cash flows from operations and $1.2

billion revolver for financing purposes

Plan to access equity only for accretive acquisitions

Will continue to de-lever throughout the year and

are targeting a lower Debt-to-EBITDA by the end of

2009

3.99 times at the end of December 31, 2008

NuStar’s Investment Grade Rating important during

these uncertain times

NuStar is one of only a handful of MLPs that has an

investment grade rating –

important for efficient

access to capital markets

Fitch revised its outlook to stable from negative on

February 20, 2009

Will continue to work with other rating agencies to

have negative outlook removed

Total Bank Credit

$1,223

Less:

Borrowings

(590)

Letters of Credit

(59)

Revolver Liquidity

$574

Standard & Poor’s: BBB-

(Negative Outlook)

Moody’s: Baa3 (Negative Outlook)

Fitch: BBB-

(Stable Outlook)

Debt/EBITDA (12/31/08): 3.99x

Debt/Capitalization (12/31/08): 46.2%

Credit Summary

(Dollars in Millions)

$1.2 billion Credit Facility

$555.3

NuStar Logistics Notes (7.65%)

349.3

NuStar Logistics Notes (6.875%)

104.7

NuStar Logistics Notes (6.05%)

240.1

Kaneb Ops. Notes (5.875%)

258.9

Kaneb Ops. Notes (7.75%)

272.5

Other Debt

114.0

Total Debt

$1,894.8

Total Partners’

Equity

2,206.9

Total Capitalization

$4,101.7

(Dollars in Millions)

No Significant Debt Maturities Until 2012

2009

$0.7

2010

$0.8

2011

$0.8

2012

$937*

2013

$481

2014

$0.6

* Primarily includes maturity of $555 million revolver

balance and $382 million of senior notes

Capital Structure (12/31/08)

Long-Term Debt Maturities (12/31/08)

No significant debt maturities until 2012 at which time the revolver and some of the senior

notes become due

2007

2008

2009

Reliability

Strategic/Other

Flexible Capital Growth Program

NuStar has no major project commitments in 2009 and has a flexible capital growth program

Continue to conservatively target around $80 million of strategic growth capital spending for 2009 in light of challenging

economic and capital market conditions

There are no shortage of growth opportunities and can quickly ratchet back up growth program when conditions improve

Major 2009 strategic projects include:

Approximately $20 million of pipeline projects on NuStar’s East pipeline, ammonia pipeline and at our St. James, LA facility

to increase the capacity and flexibility of our two pipelines and to accommodate new and existing customers

Approximately $10 million to finish up tank expansion projects at NuStar’s Texas City, TX and Amsterdam facilities as part

of our $400 million construction program

Approximately $30 million at our Texas City, TX facility to improve and upgrade it to make a world-class terminal

Approximately $14.5 million at our Paulsboro, NJ and Savannah, GA asphalt facilities to improve crude flexibility and rates,

improve

the

energy

efficiency

the

refineries

and

increase

the

production

polymer

modified

asphalt

(Dollars in Millions)

$251

$211

$40

$202

$56

$146

$145 -

$150

~$80

~$65 -

$70

Total Capital

In-Service Dates

Major

Projects

Investment

1Q08

2Q08

3Q08

4Q08

2009

Major Projects Completed in Late 2006 & 2007

$92.0

Amsterdam Expansion –

Partial P1

37.8

St.

Eustatius

Expansion

–

20.2

Texas City, TX Expansion

21.1

St. James, LA Expansion

25.6

Linden, NJ Pipeline Expansion

7.7

Jacksonville, FL Expansion

20.5

Amsterdam Expansion –

Partial P1

37.8

Amsterdam Expansion –

Option 1

5.3

St. James, LA Expansion

26.5

Amsterdam Expansion –

Option 2

29.2

Texas City, TX Expansion

13.5

Asphalt/Heavy Fuel Oil Projects

35.0

Storage and Pipeline Projects

46.0

Total

~$415

(Dollars in Millions)

P = Phase

Track record of completing large internal growth projects on-time and on-budget

Targeting around $80 million of internal growth projects in 2009

Plenty of opportunities to grow the business with around $500 million of new internal growth

project ideas and acquisition targets over the next few years

Growth opportunities primarily focused on storage expansions

Completed

$400 million Construction Program Nearly Complete –

Should Provide Solid Contribution to 2009 Results

Completed

One of the largest independent petroleum pipeline and terminal liquids operators in the world

Provides world class pipeline and terminalling services to some of the world’s largest crude oil

producers, integrated oil companies, chemical companies, oil traders and refineries

Pipeline and storage businesses somewhat recession proof

One of the largest asphalt refiners and marketers in the U.S.

Expect to benefit from better-than-historic asphalt margins as supply continues to tighten

Proposed economic stimulus package expected to provide further growth in U.S. asphalt demand

Large and diversified asset footprint in the U.S. and internationally allows for ample acquisition

and internal growth opportunities

Despite lower expected strategic capital for 2009, continue to have plenty of opportunities to grow the

business over the next few years

One of a few partnerships to have a large international presence

One of only a few partnerships with incentive distribution rights capped at 25%

Lower cost of capital provides NuStar Energy L.P. a competitive advantage

Investment grade rating and demonstrated access to capital in difficult markets

Fitch recently revised its outlook to stable from negative

Will continue to work with other rating agencies to have negative outlook removed

Experienced management team with substantial equity ownership

Higher earnings expected in 2009 despite weak global economic outlook

Investment Highlights

NuStar

Energy

L.P.

utilizes

two

financial

measures,

EBITDA

and

distributable

cash

flow,

which

are

not

defined

United

States

generally

accepted

accounting

principles.

Management

uses

these

financial

measures

because

they

are

widely

accepted

financial

indicators

used

investors

compare

partnership

performance.

addition,

management

believes

that

these

measures

provide

investors

enhanced

perspective

the

operating

performance

the

partnership's

assets

and

the

cash

that

the

business

generating.

Neither

EBITDA

nor

distributable

cash

flow

are

intended

represent

cash

flows

for

the

period,

nor

are

they

presented

alternative

net

income.

They

should

not

considered

isolation

or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.

(Dollars in Thousands)

Reconciliation of Net Income to EBITDA to

Distributable Cash Flow

Note:

2005

and

2006

distributable

cash

flow

and

EBITDA

are

from

continuing

operations

2008

2007

2006

2005

2004

2003

2002

Income from continuing operations

254,018

150,298

149,906

107,675

78,418

69,593

55,143

Plus interest expense, net

90,818

76,516

66,266

41,388

20,950

15,860

4,880

Plus income tax expense

11,006

11,448

5,861

4,713

395

Plus depreciation and amortization expense

135,709

114,293

100,266

64,895

33,149

26,267

16,440

EBITDA from continuing operations

491,551

352,555

322,299

218,671

132,517

111,720

76,858

Less equity earnings from joint ventures

8,030

6,833

5,882

2,319

1,344

2,416

3,188

Less interest expense, net

90,818

76,516

66,266

41,388

20,950

15,860

4,880

Less reliability capital expenditures

55,669

40,337

35,803

23,707

9,701

10,353

3,943

Less income tax expense

11,006

11,448

5,861

4,713

Plus mark-to-market impact on hedge transactions

(9,784)

3,131

Plus charges reimbursed by general partner

575

Plus distributions from joint ventures

2,835

544

5,141

4,657

1,373

2,803

3,590

Plus other non-cash items

2,672

Distributable cash flow from continuing operations

319,079

221,096

214,203

153,873

101,895

85,894

68,437

Year Ended December 31,

NuStar

Energy

L.P.

utilizes

two

financial

measures,

EBITDA

and

distributable

cash

flow,

which

are

not

defined

United

States

generally

accepted

accounting

principles.

Management

uses

these

financial

measures

because

they

are

widely

accepted

financial

indicators

used

investors

compare

partnership

performance.

addition,

management

believes

that

these

measures

provide

investors

enhanced

perspective

the

operating

performance

the

partnership's

assets

and

the

cash

that

the

business

generating.

Neither

EBITDA

nor

distributable

cash

flow

are

intended

represent

cash

flows

for

the

period,

nor

are

they

presented

alternative

net

income.

They

should

not

considered

isolation

or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.

2008 Debt-to-EBITDA Reconciliation

Year Ended

December 31, 2008

Net income

254,018

Plus interest expense, net

90,818

Plus income tax expense

11,006

Plus depreciation and amortization expense

135,709

EBITDA

491,551

Less equity earnings from joint ventures

(8,030)

Less other income, net

(37,739)

Less mark-to-market impact on all derivative transactions

(9,781)

Plus distributions from joint ventures

2,835

Other adjustments allowed under debt agreements

36,492

Adjusted EBITDA per debt agreements

475,328

Total Consolidated Debt at December 31, 2008

1,894,848

Debt Coverage Ratio (not greater than 5.0x)

3.986x

(Unaudited, Thousands of

Dollars, Except Ratio)

The following is a reconciliation of net income to EBITDA and Adjusted EBITDA, as defined in our debt

agreements: