NuStar Energy (NS) 8-K Other Events

Exhibit 99.1

Reconciliation of Non-GAAP Financial Information

EBITDA and Distributable Cash Flow

(Unaudited, Dollars in Thousands)

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 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.

EBITDA is defined as net income, plus:

- interest expense, net;

- income tax expense; and

- depreciation and amortization expense.

Distributable cash flow is defined as EBITDAless:

- equity earnings from joint ventures;

- interest expense, net;

- reliability capital expenditures; and

- income tax expense;

plus:

- mark-to-market impact on hedge transactions;

- charges reimbursed by general partner;

- distributions from joint ventures; and

- other non-cash items.

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

	Year Ended December 31,
	2001		2002		2003		2004		2005		2006		2007		2008			2009
Net income	$	45,873	$	55,143	$	69,593	$	78,418	$	107,675	$	149,906	$	150,298	$	254,018		$	224,875
Plus interest expense, net		3,811		4,880		15,860		20,950		41,388		66,266		76,516		90,818			79,384
Plus income tax expense		—		395		—		—		4,713		5,861		11,448		11,006			10,531
Plus depreciation and amortization expense		13,390		16,440		26,267		33,149		64,895		100,266		114,293		135,709			145,743
EBITDA		63,074		76,858		111,720		132,517		218,671		322,299		352,555		491,551			460,533
Less equity earnings from joint ventures		3,179		3,188		2,416		1,344		2,319		5,882		6,833		8,030			9,615
Less interest expense, net		3,811		4,880		15,860		20,950		41,388		66,266		76,516		90,818			79,384
Less reliability capital expenditures		2,786		3,943		10,353		9,701		23,707		35,803		40,337		55,669			45,163
Less income tax expense		—		—		—		—		4,713		5,861		11,448		11,006			10,531
Plus mark-to-market impact on hedge transactions		—		—		—		—		—		—		3,131		(9,784	)		19,970
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
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

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

Reconciliation of Non-GAAP Financial Information:

Transportation and Storage

(Unaudited, Dollars in Thousands)

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 is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. 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 EBITDA for the Transportation Segment:

	Year Ended December 31,
	2006		2007		2008		2009
Operating income	$	122,714	$	126,508	$	135,086	$	139,869
Plus depreciation and amortization expense		47,145		49,946		50,749		50,528
EBITDA	$	169,859	$	176,454	$	185,835	$	190,397

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

	Year Ended December 31,
	2006		2007		2008		2009
Operating income	$	108,486	$	114,635	$	141,079	$	171,245
Plus depreciation and amortization expense		53,121		62,317		66,706		70,888
EBITDA	$	161,607	$	176,952	$	207,785	$	242,133

Reconciliation of Non-GAAP Financial Information:

Asphalt and Fuels Marketing

(Unaudited, Dollars in Thousands)

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 is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. 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 EBITDA for the Asphalt and Fuels Marketing Segment:

	Year Ended December 31, 2008
	Asphalt and Fuels Marketing Segment		Less Fuels Marketing Operations		Asphalt Operations
Operating income	$	112,506	$	36,239	$	76,267
Plus depreciation and amortization expense		14,734		552		14,182
EBITDA	$	127,240	$	36,791	$	90,449
	Year Ended December 31, 2009
	Asphalt and Fuels Marketing Segment		Less Fuels Marketing Operations		Asphalt Operations
Operating income	$	60,629	$	9,919	$	50,710
Plus depreciation and amortization expense		19,463		—		19,463
EBITDA	$	80,092	$	9,919	$	70,173
	Six Month Ended June 30, 2010
	Asphalt and Fuels Marketing Segment		Less Fuels Marketing Operations		Asphalt Operations
Operating income	$	39,656	$	15,857	$	23,799
Plus depreciation and amortization expense		10,116		42		10,074
EBITDA	$	49,772	$	15,899	$	33,873

Reconciliation of Non-GAAP Financial Information:

Asphalt and Fuels Marketing – Continued

(Unaudited, Dollars in Thousands)

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 is not intended to represent cash flows for the period, nor is it presented as an alternative to operating income. 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 EBITDA and distributable cash flow for our asphalt operations:

	Year Ended December 31, 2008		Year Ended December 31, 2009		Six Month Ended June 30, 2010		Jan 1, 2008 - June 30, 2010
Asphalt operations operating income	$	76,267	$	50,710	$	23,799	$	150,776
Plus depreciation and amortization associated with asphalt operations		14,182		19,463		10,074		43,719
Asphalt operations EBITDA		90,449		70,173		33,873		194,495
Allocated to asphalt operations for distributable cash flow purposes:
Less general & administrative expense		18,640		16,105		10,489		45,234
Less interest expense		20,150		26,056		13,925		60,131
Less income tax expense		—		489		140		629
Less reliability capital expenditures		4,126		6,962		3,397		14,485
Asphalt operations distributable cash flow	$	47,533	$	20,561	$	5,922	$	74,016
Distributable cash flow	$	319,079	$	345,510	$	149,170	$	813,759
Less asphalt operations distributable cash flow		47,533		20,561		5,922		74,016
Non-asphalt operations distributable cash flow	$	271,546	$	324,949	$	143,248	$	739,743