RELATED PARTY TRANSACTIONS

NuStar Energy

We manage NuStar Energy through our ownership of NuStar GP, LLC and Riverwalk Holdings, LLC, which own Riverwalk Logistics L.P., the general partner of NuStar Energy. Our officers are also officers of NuStar GP, LLC and are considered dual employees of ours and of NuStar Energy. The chairman of our board of directors, William E. Greehey, is also the chairman of the board of directors of NuStar GP, LLC. The board of directors of NuStar GP, LLC is responsible for overseeing NuStar GP, LLC’s role as the general partner of the general partner of NuStar Energy, and we, as the sole owner of NuStar GP, LLC, must also approve matters that have or would reasonably be expected to have a material effect on our interests as the sole owner of NuStar GP, LLC.

GP Services Agreement. Prior to the Employee Transfer, NuStar GP, LLC performed services for NuStar Energy’s U.S. operations. Employees of NuStar GP, LLC provided services to both NuStar Energy and NuStar GP Holdings; therefore, NuStar Energy reimbursed NuStar GP, LLC for all employee costs incurred prior to the Employee Transfer, other than the expenses allocated specifically to NuStar GP Holdings (the Holdco Administrative Services Expense). For the years ended December 31, 2016 and 2015, the Holdco Administrative Services Expense totaled $0.2 million and $1.5 million, respectively. The following table summarizes information pertaining to related party transactions reimbursed by NuStar Energy:



	Year Ended December 31,
	2016		2015
	(Thousands of Dollars)
Expenses for payroll, employee benefit plans and unit-based compensation	$	32,053	$	201,852
Other expenses	$	121	$	484

In conjunction with the Employee Transfer, NuStar GP, LLC entered into an Amended and Restated Services Agreement with NuStar Services Co, a wholly owned subsidiary of NuStar Energy, effective March 1, 2016 (the Amended GP Services Agreement). The Amended GP Services Agreement provides that NuStar Services Co will furnish administrative services necessary to conduct our business. We will compensate NuStar Services Co for these services through an annual fee of $1.0 million, subject to adjustment based on the annual merit increase percentage applicable to NuStar Services Co employees for the most recently completed fiscal year and for changes in level of service. The Amended GP Services Agreement will terminate on March 1, 2020 and will automatically renew for successive two-year terms, unless terminated by either party. We incurred administrative expenses related to the Amended GP Services Agreement of $0.9 million and $0.8 million for the year ended December 31, 2017 and 2016, respectively, which is reported in related party general and administrative expenses on the consolidated statements of comprehensive income.

Assignment and Assumption Agreement. Also on March 1, 2016 and in connection with the Employee Transfer, NuStar Services Co and NuStar GP, LLC entered into an Assignment and Assumption Agreement (the Assignment Agreement). Under the Assignment Agreement, NuStar GP, LLC assigned all of its employee benefit plans, programs, contracts, policies, and various of its other agreements and contracts with certain employees, affiliates and third-party service providers (collectively, the Assigned Programs) to NuStar Services Co. In addition, NuStar Services Co agreed to assume the sponsorship of and all obligations relating to the ongoing maintenance and administration of each of the plans and agreements in the Assigned Programs.

The following table summarizes the related party transactions and changes to amounts reported on our consolidated balance sheet as a result of the Employee Transfer on March 1, 2016 (thousands of dollars):



Decrease in related party receivable:
Current	$	16,014
Long-term	32,656
Decrease in related party receivable	$	48,670

Decreases to our consolidated balance sheet:
Current and long-term assets	$	(506	)
Current liabilities	10,933
Other long-term liabilities	34,042
Accumulated other comprehensive loss	4,201
Decreases to our consolidated balance sheet	$	48,670

As shown in the table above, we transferred to NuStar Services Co $32.7 million in benefit obligations associated with the Pension Plans and other postretirement benefit plans, which were primarily reported in “Long-term liabilities” on our consolidated balance sheet prior to the Employee Transfer. Additionally, we transferred an accumulated other comprehensive income balance related to the unrecognized components of net periodic benefit cost (income) of $4.2 million. We also transferred to NuStar Services Co all outstanding awards under the Fifth Amended and Restated 2000 Long-Term Incentive Plan, which represented 730,288 units, and removed the obligation related to these unit-based awards, which was previously reported as “Current liabilities,” from our consolidated balance sheet.

Balance Sheet Items. We had a payable to NuStar Energy of $0.2 million and $0.3 million as of December 31, 2017 and 2016, respectively, mainly comprised of service fees and expenses paid on behalf of NuStar GP Holdings.

Non-Compete Agreement. On July 19, 2006, in connection with our initial public offering, we entered into a non-compete agreement with NuStar Energy (the Non-Compete Agreement). Under the Non-Compete Agreement, we will have a right of first refusal with respect to the potential acquisition of general partner and other equity interests in publicly traded partnerships under common ownership with the general partner interest. NuStar Energy has a right of first refusal with respect to the potential acquisition of assets that relate to the transportation, storage or terminalling of crude oil, feedstocks or refined petroleum products (including petrochemicals) in the United States and internationally. With respect to any other business opportunities, neither we nor NuStar Energy are prohibited from engaging in any business, even if we and NuStar Energy would have a conflict of interest with respect to such other business opportunity. The Non-Compete Agreement remains in effect for so long as we or any of our affiliates own 20% or more of NuStar GP, LLC or Riverwalk Logistics, L.P.