 Morgan Stanley Non-Deal Investor Roadshow April 2009 Exhibit 99.1 |
| Morgan Stanley Non-Deal Investor Roadshow April 2009 Exhibit 99.1 |
 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 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. For a discussion of certain of those risks, please read "Risk Factors" in Item 1A of both NuStar Energy L.P's and NuStar GP Holdings, LLC's respective annual reports on 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 2 |
 NuStar Overview |
 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 4 NS 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 5 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
|
 Assets Stats: 8,491 miles of crude oil and refined product pipelines 82 terminal facilities and four crude oil storage tank facilities Over 91 million barrels of storage capacity 2 asphalt refineries capable of processing 104,000 bpd of crude oil Asset Overview 6 |
 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 7 |
 Independent Liquids
Storage Capacity (Millions of Barrels) 8 8 10 12 16 20 24 25 31 34 39 60 85 91 91 104 171 Global Leader in
Independent Liquids Storage NuStar is the third largest independent liquids terminal operator in the world and
second largest in the U.S. Completed majority of expansion projects under
our $400 million construction program, which contributed around 8.5 million
barrels of incremental storage capacity Source: Company Websites &
Management Presentations 8 |
 $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… 9 $77 $112 $133 $219 $322 $353 $492 2002 2003 2004 2005 2006 2007 2008 2008 was a record year financially primarily due to 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 ** 10 ~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 11 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% 0% 10% 4/4/08 6/4/08 8/4/08 10/4/08 12/4/08 2/3/09 4/6/09 |
 2009 Outlook |
 13 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 |
 14 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 |
 15 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 |
 Asphalt Fundamentals |
 -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 at the start of the season to over $800 per short ton during the peak asphalt season Lack of asphalt imports was one of the main contributing factors as to why asphalt supply was tight in 2008 Venezuela has not exported any asphalt to 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 17 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 18 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 $130.00 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Lower Availability of Heavier, Sour Crudes Expected to Drive Less Asphalt Production Near-Term 19 Comparative Crude Oil Prices ($ 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 20 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 1 Coffeyville Resources - Coffeyville, Kansas II 2.0 8.0 1Q 2007 Complete 2 BP - Toledo, Ohio II 2.0 10.0 1Q 2007 Complete 3 Valero - Port Arthur, Texas III 25.0 75.0 1Q 2007 Complete 4 Frontier - Cheyenne, Wyoming IV 4.3 - 3Q 2007 Complete 5 Chevron - El Segundo, California V 15.0 - 4Q 2007 Complete 6 Sinclair – Sinclair, Wyoming IV 20.0 11.0 4Q 2007 Complete 7 ConocoPhillips - Borger, Texas III 25.0 - 4Q 2007 Complete 8 Cenex - Laurel, Montana IV 15.0 - 1Q 2008 Complete 9 Frontier - El Dorado, Kansas II 3.0 11.0 2Q 2008 Complete 10 Tesoro - Martinez, California V 4.4 - 2Q 2008 Complete 11 ConocoPhillips - Los Angeles, California V 5.0 - 4Q 2008 Firm 12 Marathon - Garyville, Louisiana III 44.0 180.0 4Q 2009 Firm 13 Valero - St. Charles, Lousiana III 10.0 45.0 1Q 2010 Firm 14 Hunt - Tuscaloosa, Alabama III 18.5 15.0 3Q 2010 Firm 15 ConocoPhillips - Wood River, Illinois II 65.0 55.0 1Q 2011 Firm 16 Atofina Petrochemicals Inc.- Port Arthur, Texas III 50.0 - 1Q 2011 Firm 17 BP/Husky - Toledo, Ohio II 25.0 - 1Q 2011 Firm 18 Pasadena Refining System - Pasadena, Texas III 29.0 100.0 2Q 2011 Probable 19 BP - Whiting, Indiana II 95.0 30.0 1Q 2012 Firm 20 Motiva - Port Arthur, Texas III 40.0 325.0 1Q 2012 Firm 21 ConocoPhillips - Borger, Texas III 20.0 34.0 2Q 2012 Probable 22 Marathon - Detroit, Michigan II 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 21 * 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 of funding in 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 85 percent of the $29 billion of funding to go towards asphalt with the remainder to 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 in addition to, and not to replace, state funding of 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 to start seeing impact from stimulus funds in the third quarter of 2009 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 |
 Financial Overview |
 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 23 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) 24 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 25 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 of the refineries and increase the production of 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 – P3 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 Completed Completed Completed Completed Completed Completed Completed $400 million Construction Program Nearly Complete – Should Provide Solid Contribution to 2009 Results Completed Completed Completed 26 |
 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 27 |
 Questions & Answers |
 Appendix 29 |
 30 NuStar Energy L.P. utilizes two financial measures, EBITDA and distributable cash flow, which are not defined in United States generally accepted accounting principles. 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 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, |
 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. 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 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: |