8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 10, 2011

NuStar Energy L.P.

(Exact name of registrant as specified in its charter)

Delaware	001-16417	74-2956831
State or other jurisdiction Of incorporation	(Commission File Number)	(IRS Employer Identification No.)

2330 North Loop 1604 West San Antonio, Texas	78248
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (210) 918-2000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On Friday, February 11, 2011, senior management of NuStar Energy L.P. (the “Company”) will make a presentation (the “Presentation”) to investors at the 2011 Credit Suisse Energy Summit in Vail, Colorado at 11:25 a.m. (Eastern Time). The slides attached to this report were prepared in connection with the Presentation. The slides are included in Exhibit 99.1 to this report and are incorporated herein by reference. The slides will be available on the Company’s website at www.nustarenergy.com. Additionally, a live audio webcast and replays of the Presentation will be available beginning at approximately 11:25 a.m. (Eastern Time) on February 11, 2011 on the “Investors” section of its website at www.nustarenergy.com.

The information in this report is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in Items 7.01 and 9.01 of this report will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Company that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company or any of its affiliates.

The exhibit to this report may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal securities law. It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the Company’s Annual Report on Form 10-K and other documents that the Company has filed with the Securities and Exchange Commission. In addition, we do not intend to update these statements unless it is 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 Slides from presentation to be used on February 11, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NuStar Energy L.P.
	By:	Riverwalk Logistics, L.P., its general partner
		By:	NuStar GP, LLC, its general partner
Date: February 10, 2011	By:	/s/    AMY L. PERRY
		Amy L. Perry Vice President and Corporate Secretary

EXHIBIT INDEX

Number	Exhibit
99.1	Slides from presentation to be used on February 11, 2011.

EX-99.1

2011 Credit Suisse Energy Summit

Steve Blank, Senior Vice President, CFO and Treasurer

February 11, 2011

Exhibit 99.1

Statements

contained

in

this

presentation

that

state

management’s

expectations

or

predictions

of

the

future

are

forward-looking

statements

as

defined

by

federal

securities

law.

The

words

“believe,”

“expect,”

“should,”

“targeting,”

“estimates,”

and

other

similar

expressions

identify

forward-

looking

statements.

It

is

important

to

note

that

actual

results

could

differ

materially

from

those

projected

in

such

forward-looking

statements.

We

undertake

no

duty

to

update

any

forward-looking

statement

to

conform

the

statement

to

actual

results

or

changes

in

the

company’s

expectations.

For

more

information

concerning

factors

that

could

cause

actual

results

to

differ

from

those

expressed

or

forecasted,

see

NuStar

Energy

L.P.’s

and

NuStar

GP

Holdings,

LLC’s

respective

annual

reports

on

Form

10-K

and

quarterly

reports

on

Form

10-Q,

filed

with

the

Securities

and

Exchange

Commission

and

available

on

NuStar’s

websites

at

www.nustarenergy.com

and

www.nustargpholdings.com.

Forward Looking Statements

2

NuStar Overview

3

NuStar Energy L.P. (NYSE: NS) is

a leading publicly traded

partnership with a market

capitalization of around $4.4 billion

and an enterprise value of

approximately $6.4 billion

NuStar GP Holdings, LLC (NYSE:

NSH) holds the 2% general

partner interest, incentive

distribution rights and 15.6% of the

common units in NuStar Energy

L.P. with a market capitalization of

around $1.6 billion

Two Publicly Traded Companies

NS

NSH

IPO Date:

4/16/2001

7/19/2006

Unit Price (02/04/11):

$68.26

$36.42

Annual Distribution/Unit:

$4.30

$1.92

Yield (02/04/11):

6.30%

5.27%

Market Capitalization:

$4,410 million

$1,550 million

Enterprise Value

$6,366 million

$1,561 million

Credit Ratings –

Moody’s

Baa3/Stable

n/a

S&P and Fitch

BBB-/Stable

n/a

83.1%

Membership Interest

82.4%

L.P. Interest

Public Unitholders

35.4 Million NSH Units

Public Unitholders

54.3 Million NS Units

16.9%

Membership

Interest

2.0% G.P. Interest

15.6% L.P. Interest

Incentive Distribution Rights

William E. Greehey

7.2 Million NSH Units

NYSE:  NSH

NYSE: NS

4

Large and Diverse Geographic Footprint               

with Assets in Key Locations

Asset Stats:

Operations in seven

different countries

including the U.S.,

Mexico, Netherlands,

England, Ireland,

Scotland and Canada

8,417 miles of crude oil

and refined product

pipelines

Own 88 terminal and

storage facilities

Over 93 million barrels of

storage capacity

2 asphalt refineries on

the U.S. East Coast

capable of processing

104,000 bpd of crude oil

5

43%

35%

22%

Percentage of 2010

Segment Operating Income

Approximately 78% of NuStar Energy’s 2010 segment operating income came

from fee-based transportation and storage segments

Remainder of 2010 segment operating income was related to margin-based

asphalt and fuels marketing segment

Storage: 43%

Transportation: 35%

Refined Product Terminals

Crude Oil Storage

Refined Product Pipelines*

Crude Oil Pipelines

Asphalt & Fuels Marketing: 22%

Asphalt

Fuels Marketing

Product Supply, Bunkering and Fuel Oil

Marketing

Diversified Operations from Three

Business Segments

*  Includes primarily distillates, gasoline, propane, jet fuel, ammonia and other light products.  Does not include natural gas.

6

Historical Distributable Cash Flows

7

NS Distributable Cash Flows ($ in Millions)

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

$56

$68

$86

$102

$154

$214

$221

$319

$346

$320

•

2011

distributable

cash

flows

projected

to

be

higher

than

2009

levels

NuStar

Energy L.P.’s Distribution has been Covered

by the Non-Asphalt Operations Distributable Cash

Flows Since Asphalt Acquisition in March 2008

Jan 1, 2008 –

December 31, 2010

Non-Asphalt Operations Distributable Cash Flows              

$896.3*

Total Distribution

835.7

Excess Distributable Cash Flows

$60.6

% of Distribution Covered by

Non-Asphalt Operations Distributable Cash Flows

107%

Asphalt Operations Distributable Cash Flows

$88.5

*   Includes transportation, storage and fuels marketing operations

8

(Dollars in Millions)

Transportation Segment

Overview

9

2006

2007

2008

2009

2010

$170

$176

$186

$190

$199

10

2010 Transportation Segment Results Improved over 2009..

2011 EBITDA Expected to be lower than 2010

Transportation Segment EBITDA

(in Millions)

2010 Summary

Record EBITDA for transportation segment

Throughputs ~1% higher than 2009.  Improving economy and customer turnaround

delayed into 2011.

Higher tariff revenue due to increased tariff rates and increased throughput

volumes on higher tariff long haul pipelines.

2011 Outlook

$1-$5 million of additional EBITDA from internal growth projects. Eagle Ford  shale

crude project with Koch Pipeline Company should be completed in mid-2011.

Revised FERC Indexation adjustment of 2.65% takes effect July 1, 2011.  Tariffs

projected to increase ~7% on July 1, 2011.

Throughputs projected to be down ~4%.  Heavy customer turnaround schedule

and changing market conditions could negatively impact throughputs.

Segment EBITDA expected to be $5-$10 million lower in 2011.

Transportation Segment Assets in close

proximity to key Shale Formations

Transportation Segment Assets in close

proximity to key Shale Formations

Shale Development Strategy

There are four key shale developments located in NuStar’s Mid-Continent and Gulf

Coast regions, including the Bakken, Niobrara, Barnett, and Eagle Ford

developments

Our strategy is to optimize and grow the existing asset base, and maximize the

value of the assets located in or near shale developments

11

Storage Segment Overview

12

2010 Storage Segment Results Improved over 2009

..2011 EBITDA Expected to be Higher than 2010

13

Storage Segment EBITDA

(in Millions)

2010 Summary

Record EBITDA for Storage Segment

Storage

tank

renewals

and

escalations

increased

revenues

during

the

year.

Acquired three storage terminal facilities in Mobile, AL in May, 2010.

St.

Eustatius

terminal

reconfiguration

project

completed

in

4

th

quarter.

2011 Outlook

Demand for storage should remain strong

Expect to close on Joint Venture agreement related to two Turkey storage terminal facilities

in 1

st

quarter 2011.

Benefits

from

St.

James

Phase

1

storage

expansion

project

should

begin

in

3

rd

quarter

2011.

Full year of EBITDA from Mobile, AL acquisition and St. Eustatius terminal project.

Segment EBITDA should be $30 to $40 million higher.

2006

2007

2008

2009

2010

$162

$177

$208

$242

$256

Plan to expand our St. James, Louisiana

terminal in two phases

Phase 1 –

Third-Party Crude Oil Storage

Construct 3.2 million barrels of crude oil storage

Projected CAPEX of $125 to $145 million, with projected average annual

EBITDA of $15 to $25 million

Expected

in-service

3

rd

quarter

2011

Phase 2 –

Third-Party Crude Oil Storage

Project in early planning stages

Should be similar in size to Phase 1 project

Could grow in size based on customer demand

Expected in-service last half of 2012

14

Plan to construct new tanks for distillate

service at our St. Eustatius terminal

Construct one million barrels of new storage for distillate service

Interested customers include several large oil companies

Projected CAPEX of $40 to $50 million, with projected average

annual EBITDA of $5 to $10 million

Expected

in-service

3

rd

quarter

2012

15

Joint Venture (JV) Overview

NuStar

entered into a JV agreement

with S-Oil and Aves Oil, two Turkish

companies. 

Cost of buying stock in JV entity

~$54 million.

The JV should own 100% of two

terminals in Mersin and land in

Giresun

and Ceyhan.  Estimated

terminal capacity 1.3 million barrels.

NuStar

should own 75% of the JV

and operate the terminals

Both terminals connect via pipeline

to an offshore platform (SAVKA) 5

km off the Turkish coastline

Upon

Projected

1

st

Quarter

2011

Closing,

Acquired

Assets in Turkey Provide Platform for Internal Growth

Growth Opportunities

Expansion project under development at Mersin

Expands existing storage by about 70 percent

Potential to tie into NATO Pipeline

Provides access to markets for military fuels

New terminal at Giresun

37-acre site with access to Black Sea ports

200,000 barrel fuel oil terminal under development

Second phase build-out to 1.9 million barrels under

evaluation

New terminal at Ceyhan

Ceyhan

is the destination for pipelines delivering

crude from northern Iraq and the Caspian area to

the Mediterranean

173 acre property is well-suited for building up to

6.3 million barrels of storage and marine jetty

16

Asphalt & Fuels Marketing

Segment Overview

17

$27

$22

$37

$10

$37

$90

$70

$74

Asphalt

Fuels Marketing

$3.78

$8.75

$6.37

$7.73

Improved Earnings in Bunkering, Heavy Fuels and Asphalt Operations caused

Segment Results to be higher in 2010…

Segment  Should See Slightly Improved Results in 2011

Asphalt & Fuels Marketing

U.S. East Coast Product Margin ($ per barrel)

18

2009

Actual

2008

Actual

2000-2007

Average

2010 Summary

Asphalt results slightly higher than 2009. 

Total U.S. asphalt demand up ~1% through November.

During

the

3

quarter,

pipeline

disruptions

of

Canadian

crude

supply

reduced

heavy

crude

runs

in

the

Northeast

reducing asphalt supply.

NuStar

higher margin rack asphalt sales volumes were ~ 6% higher than 2009.

Fuels Marketing portion of segment $27 million higher than 2009.

Improved bunker marketing earnings at St. Eustatius and our Texas City facility contributed to increased  earnings.

Increased Fuel Oil Trading business at Texas City, also contributed to year-over-year increase.

•

Increase

primarily

attributable

to

internal

growth

project

coming

online

at

Texas

City

in

the

4

quarter

2011 Outlook

Continued

increase

in

asphalt

demand

and

tighter

Asphalt

supply

in

late

2011,

due

to

Conoco

Wood

River

coker

coming

on-line, should cause asphalt operations EBITDA to be slightly improved. 

EBITDA in Fuels Marketing should be slightly higher than 2010.

•

Should

benefit

from

full-year

of

EBITDA

from

Fuel

Oil

trading

at

Texas

City.

EBITDA (MM$)

2010

Actual

2006

2007

2008

2009

2010

$80

$111

$127

th

th

Financial Overview

19

20

12/31/10 Revolver Availability

NuStar Revolver Availability has increased due to

Equity Issuances and Senior Note Issuance –

Credit Ratings and Metrics have Improved as a Result

Total Bank Credit

$1,212

Less:

Borrowings

(188)

Letters of Credit

Go Zone Financing

(294)

Other

(5)

Revolver Availability

$725

Standard & Poor’s: BBB-

(Stable

Outlook)

Moody’s: Baa3 (Stable Outlook)

Fitch: BBB-

(Stable Outlook)

Debt/EBITDA (12/31/10): 4.6x

Debt/Capitalization (12/31/10): 44.2%

Credit Ratings/Metrics

(Dollars in Millions)

5.0x Revolver Debt/EBITDA covenant limits true Revolver availability to 

~$200 million at 12/31/10

All three Rating Agencies upgraded NuStar to Stable Outlook from

Negative Outlook during 2010

$1.2 billion Credit Facility

$188

GO Zone Bonds

290

NuStar

Logistics Notes (4.80%)

420

NuStar

Logistics Notes (7.65%)

349

NuStar

Logistics Notes (6.875%)

103

NuStar

Logistics Notes (6.05%)

237

NuStar

Pipeline Notes(5.875%)

255

NuStar

Pipeline Notes (7.75%)

259

Other Debt

36

Total Debt

$2,137

(Dollars in Millions)

No Significant Debt Maturities Until 2012

2011

$0.8

2012

$583*

2013

$493

2014

$0

2015

$0

Thereafter

$1,060

*  Primarily includes maturity of $188 million revolver

balance and $362 million of senior notes

12/31/10 Debt Structure

12/31/10 Debt Structure Maturities

21

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

become due

Forward interest rate swaps in place for $500 million of $830 million 2012 and 2013

senior note maturities

New Credit Revolver terms & pricing seem to be improving as economy improves

Current plan is to hold off closing on a new Revolver until 2012

Debt

structure

approximately

50%

fixed

rate

–

50%

variable

rate

No plans to issue additional debt or equity in 2011

Majority of 2011 Internal Growth Capital

Will to be spent in the Storage Segment

22

(

Dollars in Millions)

Annual Internal Growth Spending By Business Segment

$11

$20

$13

$21

$128

$107

$159

$224

$3

$14

$20

$11

$4

$23

$27

$80

2008 Actual

2009 Actual

2010 Actual

2011 Forecast

Corporate

Asphalt & Fuels Marketing

Storage

Transportation

$164

$146

$219

$336

High quality, large and diverse asset footprint supporting energy infrastructure both in

the U.S. and internationally

Contracted fee-based storage and transportation assets provide stable cash flows,

delivering 78% of 2010 operating income

Fourth largest independent liquids terminal operator in the world

Diverse and high quality customer base composed of large integrated oil companies,

national oil companies and refiners

Strong balance sheet, credit metrics and commitment to maintain investment grade

credit ratings

Lower cost of capital than majority of peers

Experienced and proven management team with substantial equity ownership and

industry experience

Recognized nationally for safety and environmental record as well as one of the best

places to work

Investment Highlights

23

25

Appendix

26

Reconciliation of Non-GAAP Financial Information:

EBITDA and Distributable Cash Flow

(Unaudited, Dollars in Thousands)

The following is a reconciliation of net income to EBITDA and distributable cash flow:

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Net income

45,873

$     

55,143

$     

69,593

$     

78,418

$       

107,675

$     

149,906

$     

150,298

$     

254,018

$     

224,875

$     

238,970

$     

Plus interest expense, net

3,811

4,880

15,860

20,950

41,388

66,266

76,516

90,818

79,384

78,280

Plus income tax expense

-

395

-

-

4,713

5,861

11,448

11,006

10,531

11,741

Plus depreciation and amortization expense

13,390

16,440

26,267

33,149

64,895

100,266

114,293

135,709

145,743

153,802

EBITDA

63,074

76,858

111,720

132,517

218,671

322,299

352,555

491,551

460,533

482,793

Less equity earnings from joint ventures

3,179

3,188

2,416

1,344

2,319

5,882

6,833

8,030

9,615

10,500

Less interest expense, net

3,811

4,880

15,860

20,950

41,388

66,266

76,516

90,818

79,384

78,280

Less reliability capital expenditures

2,786

3,943

10,353

9,701

23,707

35,803

40,337

55,669

45,163

54,031

Less income tax expense

-

-

-

-

4,713

5,861

11,448

11,006

10,531

11,741

Plus mark-to-market impact on hedge transactions

-

-

-

-

-

-

3,131

(9,784)

19,970

(17,640)

Plus charges reimbursed by general partner

-

-

-

-

-

575

-

-

-

-

Plus distributions from joint ventures

2,874

3,590

2,803

1,373

4,657

5,141

544

2,835

9,700

9,625

Plus other non-cash items

-

-

-

-

2,672

-

-

-

-

-

Distributable cash flow

56,172

$     

68,437

$     

85,894

$     

101,895

$     

153,873

$     

214,203

$     

221,096

$     

319,079

$     

345,510

$     

320,226

$     

Note:  2005 and 2006 distributable cash flow and EBITDA are from continuing operations.

Year Ended December 31,

NuStar

Energy

L.P.

utilizes

two

financial

measures,

EBITDA

and

distributable

cash

flow,

which

are

not

defined

in

United

States

generally

accepted

accounting

principles

(GAAP).

Management

uses

these

financial

measures

because

they

are

a

widely

accepted

financial

indicators

used

by

investors

to

compare

partnership

performance.

In

addition,

management

believes

that

these

measures

provide

investors

an

enhanced

perspective

of

the

operating

performance

of

the

partnership's

assets

and

the

cash

that

the

business

is

generating.

Neither

EBITDA

nor

distributable

cash

flow

are

intended

to

represent

cash

flows

for

the

period,

nor

are

they

presented

as

an

alternative

to

net

income.

They

should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP.

Reconciliation of Non-GAAP Financial Information: 

Transportation Segment

27

(Unaudited, Dollars in Thousands)

The following is a reconciliation of operating income to EBITDA for the Transportation Segment:

2006

2007

2008

2009

2010

Operating income

122,714

$         

126,508

$                

135,086

$         

139,869

$         

148,571

$         

Plus depreciation and amortization expense

47,145

49,946

50,749

50,528

50,617

EBITDA

169,859

$         

176,454

$                

185,835

$         

190,397

$         

199,188

$         

Projected incremental operating income range

$    1,000  -

4,000

Plus projected incremental depreciation and

amortization expense range

0  -

1,000

Projected incremental EBITDA range

$    1,000  -

5,000

Projected decrease in operating income range

($ 5,500 -

11,000)

Plus projected incremental depreciation and

amortization expense range

500 -

1,000

Projected decrease in EBITDA range

($ 5,000 -

10,000)

EBITDA

in

the

following

reconciliations

relate

to

our

reportable

segments

or

a

portion

of

a

reportable

segment.

We

do

not

allocate

general

and

administrative

expenses

to

our

reportable

segments

because

those

expenses

relate

primarily

to

the

overall

management

at

the

entity

level.

Therefore,

EBITDA

reflected

in

the

following

reconciliations

excludes

any

allocation

of

general

and

administrative

expenses

consistent

with

our

policy

for

determining

segmental

operating

income,

the

most

directly

comparable

GAAP

measure.

EBITDA

should

not

be

considered

in

isolation

or

as

a

substitute

for

a

measure

of performance prepared in accordance with GAAP.

Transportation

Segment

Year Ended December 31,

The following is a reconciliation of projected decrease in operating income to projected decrease in EBITDA for the year ended December 31, 2011

compared to the year ended December 31, 2010:

The following is a reconciliation of projected incremental operating income to projected incremental EBITDA related to our internal growth program

for the year ended December 31, 2011 compared to the year ended December 31, 2010:

Transportation

Segment

Reconciliation of Non-GAAP Financial Information:

Storage Segment

28

(Unaudited, Dollars in Thousands)

The following is a reconciliation of operating income to EBITDA for the Storage Segment:

2006

2007

2008

2009

2010

Operating income

108,486

$         

114,635

$                

141,079

$         

171,245

$           

178,947

$         

Plus depreciation and amortization expense

53,121

62,317

66,706

70,888

77,071

EBITDA

161,607

$         

176,952

$                

207,785

$         

242,133

$           

256,018

$         

Projected incremental operating income range

$ 25,000  -

34,000

Plus projected incremental depreciation and

amortization expense range

5,000  -

6,000

Projected incremental EBITDA range

$ 30,000  -

40,000

St. James, LA

Terminal

Expansion

Phase 1

St. Eustatius

Distillate

Project

Projected annual operating income range

$ 11,000  -

20,000

$  4,000  -

8,000

Plus projected annual depreciation and

amortization expense range

4,000  -

5,000

1,000  -

2,000

Projected annual EBITDA range

$ 15,000  -

25,000

$ 5,000  -

10,000

The

following

is

a

reconciliation

of

projected

annual

operating

income

to

projected

annual

EBITDA

for

certain

projects

in

our

storage

segment

related

to our internal growth program:

The

following

is

a

reconciliation

of

projected

incremental

operating

income

to

projected

incremental

EBITDA

related

to

our

internal

growth

program

for

the year ended December 31, 2011 compared to the year ended December 31, 2010:

Storage

Segment

EBITDA

in

the

following

reconciliations

relate

to

our

reportable

segments

or

a

portion

of

a

reportable

segment.

We

do

not

allocate

general

and

administrative

expenses

to

our

reportable

segments

because

those

expenses

relate

primarily

to

the

overall

management

at

the

entity

level.

Therefore,

EBITDA

reflected

in

the

following

reconciliations

excludes

any

allocation

of

general

and

administrative

expenses

consistent

with

our

policy

for

determining

segmental

operating

income,

the

most

directly

comparable

GAAP

measure.

EBITDA

should

not

be

considered

in

isolation

or

as

a

substitute

for

a

measure

of

performance

prepared in accordance with GAAP.

Year Ended December 31,

Reconciliation of Non-GAAP Financial Information:

Asphalt & Fuels Marketing Segment

29

(Unaudited, Dollars in Thousands)

Asphalt

Operations

Fuels

Marketing

Operations

Asphalt and

Fuels Marketing

Segment

Operating income

53,977

$                  

36,884

$               

90,861

$                

Plus depreciation and amortization expense

20,164

93

20,257

EBITDA

74,141

$                  

36,977

$               

111,118

$              

Asphalt

Operations

Fuels

Marketing

Operations

Asphalt and

Fuels Marketing

Segment

Operating income

50,710

$                  

9,919

$                  

60,629

$                

Plus depreciation and amortization expense

19,463

-

19,463

EBITDA

70,173

$                  

9,919

$                  

80,092

$                

Year Ended

December 31, 2007

Year Ended

December 31, 2006

Asphalt

Operations

Fuels

Marketing

Operations

Asphalt and

Fuels Marketing

Segment

Asphalt and Fuels

Marketing

Segment

Asphalt and Fuels

Marketing

Segment

Operating income

76,267

$                  

36,239

$               

112,506

$              

21,111

$                       

26,815

$                       

Plus depreciation and amortization expense

14,182

552

14,734

423

-

EBITDA

90,449

$                  

36,791

$               

127,240

$              

21,534

$                       

26,815

$                       

Year Ended December 31, 2010

Year Ended December 31, 2009

Year Ended December 31, 2008

The following tables reconcile operating income to EBITDA for asphalt operations and fuels marketing operations in our asphalt and fuels marketing segment:

EBITDA

in

the

following

reconciliations

relate

to

our

reportable

segments

or

a

portion

of

a

reportable

segment.

We

do

not

allocate

general

and

administrative

expenses

to

our

reportable

segments

because

those

expenses

relate

primarily

to

the

overall

management

at

the

entity

level.

Therefore,

EBITDA

reflected

in

the

following

reconciliations

excludes

any

allocation

of

general

and

administrative

expenses

consistent

with

our

policy

for

determining

segmental

operating

income,

the

most

directly

comparable

GAAP

measure.

EBITDA should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP.

Reconciliation of Non-GAAP Financial Information:

Asphalt Operations Distributable Cash Flow

30

(Unaudited, Dollars in Thousands)

2010

2009

2008

Total

Asphalt operations operating income

53,977

$                  

50,710

$                  

76,267

$                  

180,954

$                

Plus depreciation and amortization

20,164

19,463

14,182

53,809

Asphalt operations EBITDA

74,141

70,173

90,449

234,763

Less general & administrative expense

19,954

16,105

18,640

54,699

Less interest expense

27,851

26,056

20,150

74,057

Less income tax expense

120

489

0

609

Less reliability capital expenditures

5,790

6,962

4,126

16,878

Asphalt operations distributable cash flow

20,426

$                  

20,561

$                  

47,533

$                  

88,520

$                  

EBITDA

in

the

following

reconciliations

relate

to

our

reportable

segments

or

a

portion

of

a

reportable

segment.

We

do

not

allocate

general

and

administrative

expenses

to

our

reportable

segments

because

those

expenses

relate

primarily

to

the

overall

management

at

the

entity

level.

Therefore,

EBITDA

reflected

in

the

following

reconciliations

excludes

any

allocation

of

general

and

administrative

expenses

consistent

with

our

policy

for

determining

segmental

operating

income,

the

most

directly

comparable

GAAP

measure.

EBITDA

should

not

be

considered

in

isolation

or

as

a

substitute

for

a

measure

of

performance

prepared

in accordance with GAAP.

The

following

is

a

reconciliation

of

operating

income

to

projected

annual

adjusted

EBITDA

for

certain

projects

in

our

storage

segment

related

to

our

internal growth program:

Allocated to asphalt operations for

distributable cash flow purposes:

Year Ended December 31,