NuStar GP Holdings, LLC Reports Highest Quarterly Earnings in Company's History;...

NuStar GP Holdings, LLC Reports Highest Quarterly Earnings in Company's History; Previously Announced Increase in Quarterly Distribution to $0.43 Per Unit

SAN ANTONIO--(Business Wire)--
NuStar GP Holdings, LLC (NYSE:NSH) today announced record earnings
of $34.8 million, or $0.82 per unit, for the third quarter of 2008,
nearly 2.5 times higher than the $14.1 million, or $0.33 per unit,
earned in the third quarter of 2007. The third quarter 2008 results
represent the highest quarterly earnings in the company's history.
Distributable cash flow available to unitholders for the third quarter
of 2008 was $18.3 million, or $0.43 per unit, compared to $15.1
million, or $0.35 per unit, for the third quarter of 2007.

With respect to the quarterly distribution to unitholders for the
third quarter of 2008, NuStar GP Holdings, LLC previously announced
that its board of directors had increased the quarterly distribution
rate to $0.43 per unit, which would equate to $1.72 per unit on an
annual basis. This quarterly distribution represents an increase of
$0.07 per unit, or 19.4 percent, over the $0.36 distribution for the
second quarter of 2008 and third quarter of 2007 and will be paid on
November 14, 2008, to holders of record as of November 5, 2008.

"NuStar GP Holdings, LLC's record third quarter is due to NuStar
Energy L.P.'s solid distribution increase and outstanding third
quarter results, which primarily benefited from the strong
contribution of the asphalt operations acquired in March. This allowed
us to provide a significant increase in the distribution to our
unitholders who benefit from the incentive distribution rights. NuStar
Energy L.P.'s continued growth and disciplined financial strategy
should translate into further distribution growth for NuStar GP
Holdings, LLC," said Curt Anastasio, Chief Executive Officer and
President of NuStar Energy L.P. and NuStar GP Holdings, LLC.

A conference call with management is scheduled for 11:00 a.m. ET
(10:00 a.m. CT) today, October 23, 2008, to discuss the financial
results for the third quarter of 2008. Investors interested in
listening to the presentation may call 800-622-7620, passcode
67543575. International callers may access the presentation by dialing
706-645-0327, passcode 67543575. The company intends to have a
playback available following the presentation, which may be accessed
by calling 800-642-1687, passcode 67543575. A live broadcast of the
conference call will also be available on the company's Web site at
www.nustargp.com.

NuStar GP Holdings, LLC is a publicly traded limited liability
company that owns the two percent general partner interest, an 18.5
percent limited partner interest and the incentive distribution rights
in NuStar Energy L.P., one of the largest asphalt refiners and
marketers in the U.S. and the second largest independent liquids
terminal operator in the nation with operations in the United States,
the Netherlands Antilles, Canada, Mexico, the Netherlands and the
United Kingdom. For more information, visit NuStar GP Holdings, LLC's
Web site at www.nustargp.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding
future events. All forward-looking statements are based on the
company's beliefs as well as assumptions made by and information
currently available to the company. These statements reflect the
company's current views with respect to future events and are subject
to various risks, uncertainties and assumptions. These risks,
uncertainties and assumptions are discussed in NuStar GP Holdings,
LLC's 2007 annual report on Form 10-K and subsequent filings with the
Securities and Exchange Commission.

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NuStar GP Holdings, LLC
Consolidated Financial Information
(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)

Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Statement of Income
Data:
Equity in earnings
of NuStar Energy
L.P. $ 35,662 $ 15,033 $ 58,120 $ 36,541

General and
administrative
expenses (793) (665) (2,359) (2,208)
Other expense, net (36) - (118) (2)
Interest (expense)
income, net (57) 29 (153) 43
----------- ----------- ----------- -----------

Income before income
tax benefit
(expense) 34,776 14,397 55,490 34,374
Income tax benefit
(expense) 34 (313) 103 (271)
----------- ----------- ----------- -----------
Net income $ 34,810 $ 14,084 $ 55,593 $ 34,103
=========== =========== =========== ===========

Basic and diluted net
income per unit $ 0.82 $ 0.33 $ 1.31 $ 0.80
=========== =========== =========== ===========

Equity in Earnings of
NuStar Energy L.P.:
General partner
interest (2%) $ 2,888 $ 927 $ 4,069 $ 2,176
General partner
incentive
distribution 6,929 4,915 17,835 13,238
----------- ----------- ----------- -----------
General partner's
interest in earnings
of NuStar Energy
L.P. 9,817 5,842 21,904 15,414
Limited partner
interest in earnings
of NuStar Energy
L.P. 26,566 9,912 38,379 23,290
Amortization of step-
up in basis related
to NuStar Energy
L.P.'s assets and
liabilities (721) (721) (2,163) (2,163)
----------- ----------- ----------- -----------
Equity in earnings of
NuStar Energy L.P. $ 35,662 $ 15,033 $ 58,120 $ 36,541
=========== =========== =========== ===========

Distributable Cash
(Note 1):
Cash distributions
from NuStar Energy
L.P. associated
with:
General partner
interest (2%) $ 1,318 $ 1,041 $ 3,740 $ 2,992
Incentive
distribution
rights (Note 2): 6,929 4,915 18,365 13,238
Limited partner
interest-common
units 10,872 10,083 31,003 29,156
----------- ----------- ----------- -----------
Total cash
distributions from
NuStar Energy L.P. 19,119 16,039 53,108 45,386
Deduct expenses of
NuStar GP Holdings,
LLC:
General and
administrative
expenses (793) (665) (2,359) (2,208)
Income tax benefit
(expense) 34 (313) 103 (271)
Interest (expense)
income, net (57) 29 (153) 43
----------- ----------- ----------- -----------
Distributable
cash flow $ 18,303 $ 15,090 $ 50,699 $ 42,950
=========== =========== =========== ===========

Units outstanding 42,501,433 42,500,420 42,501,139 42,500,141

Distributable cash
flow per unit $ 0.43 $ 0.35 $ 1.19 $ 1.01
=========== =========== =========== ===========

Cash distributions to
be paid to the
unitholders of
NuStar GP Holdings,
LLC:
Distribution per
unit $ 0.43 $ 0.36 $ 1.15 $ 1.02
=========== =========== =========== ===========

Total distribution $ 18,276 $ 15,300 $ 48,876 $ 43,350
=========== =========== =========== ===========
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NuStar GP Holdings, LLC
Consolidated Financial Information
(Unaudited, Thousands of Dollars)

Notes:

1. NuStar GP Holdings, LLC utilizes distributable cash flow as a
financial measure which is not defined in United States generally
accepted accounting principles. Management uses this financial
measure because it is a widely accepted financial indicator used
by investors to compare general partner performance. In addition,
management believes that this measure provides investors an
enhanced perspective of the ability to make a minimum quarterly
distribution. Distributable cash flow is not intended to
represent cash flows for the period, nor is it presented as an
alternative to net income. It should not be considered in
isolation or as a substitute for a measure of performance
prepared in accordance with United States generally accepted
accounting principles.

The following is a reconciliation of net income to distributable
cash flow to net cash provided by operating activities:
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Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Net Income $ 34,810 $ 14,084 $ 55,593 $ 34,103
Less equity in earnings
of NuStar Energy L.P. (35,662) (15,033) (58,120) (36,541)
Plus cash distributions
from NuStar Energy L.P. 19,119 16,039 53,108 45,386
Plus other expense, net 36 - 118 2
--------- --------- --------- ---------
Distributable cash flow 18,303 15,090 50,699 42,950
Less cash distributions
from NuStar Energy L.P. (19,119) (16,039) (53,108) (45,386)
Plus distributions of
equity in earnings of
NuStar Energy L.P. 27,886 15,033 50,344 36,541
Net effect of changes in
operating accounts 424 (1,276) (86) 1,284
--------- --------- --------- ---------
Net cash provided by
operating activities $ 27,494 $ 12,808 $ 47,849 $ 35,389
========= ========= ========= =========

2. NuStar Energy L.P.'s net income allocation for the first quarter
2008 to general and limited partners reflected total cash
distributions based upon the partnership interests outstanding as
of March 31, 2008. NuStar Energy L.P. issued approximately 5.1
million common units in April 2008. Actual distribution payments
are made within 45 days after the end of each quarter as of a
record date that is set after the end of each quarter. As such,
the general partner's portion of the actual cash payment made with
respect to the first quarter 2008, including the incentive
distribution rights, was greater than the net income allocated to
the general partner.
*T

NuStar GP Holdings, LLC, San Antonio
Investors, Mark Meador, Director,
Investor Relations: 210-918-2895
or
Media, Mary Rose Brown, Senior Vice President,
Corporate Communications: 210-918-2314

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