HOUSTON, July 28 /PRNewswire-FirstCall/ -- Buckeye Partners, L.P.
(NYSE: BPL) ("Buckeye") today reported its financial results for
the second quarter of 2009. Net income attributable to Buckeye's
unitholders before special charges for the second quarter of 2009
was $52.1 million, or $0.78 per LP unit, compared with net income
attributable to Buckeye's unitholders of $40.9 million, or $0.63
per LP unit, reported for the second quarter of 2008. Buckeye's
Adjusted EBITDA (as defined below) for the second quarter of 2009
was $84.2 million compared to $73.3 million in the second quarter
of the prior year. As previously announced, Buckeye recorded
special charges during the second quarter to recognize an asset
impairment and for expenses related to an organizational
restructuring. The special charges associated with these actions
were $72.5 million and $28.1 million, respectively. After the
special charges, Buckeye reported a net loss of $48.4 million, or
$1.17 per LP unit, for the second quarter of 2009. Forrest E.
Wylie, Chairman and CEO of Buckeye's general partner, stated,
"Despite serious challenges presented in the current economic
climate, Buckeye continued to perform well through the second
quarter. Adjusted EBITDA for the second quarter and first half of
2009 increased 15% and 17%, respectively, relative to those periods
in 2008. Although we experienced volume declines in our pipeline
and terminalling and storage businesses that largely offset the
benefits of increased tariffs and fees, new terminals added since
the second quarter of 2008 and effective cost management made a
substantial contribution to our earnings in the second quarter of
2009." "In addition, we continue to take important steps to
position the company well for both difficult economic times and in
anticipation of eventual economic recovery," Wylie continued. "As
we previously announced, we are implementing comprehensive
organizational changes that we expect will result in annual savings
of $18-22 million beginning in 2010. These changes should enhance
our competitive market position through improved customer service,
higher productivity, and lower operating costs, and enable us to
respond more rapidly to changing needs in the markets we serve. We
are pleased to announce that, in light of Buckeye's solid operating
results for the second quarter of 2009, the Board of Directors of
Buckeye's general partner has approved a $0.0125 increase in the
quarterly cash distribution to unitholders." The Board of Directors
of Buckeye GP LLC, the general partner of Buckeye, declared a
regular quarterly partnership cash distribution of $0.9125 per LP
unit, payable August 31, 2009 to unitholders of record on August 7,
2009. As indicated by Mr. Wylie, this cash distribution represents
a quarterly increase in the distribution of $0.0125 per LP unit to
an annualized cash distribution level of $3.65 per LP unit. This is
the 90th consecutive quarterly cash distribution paid by Buckeye.
Buckeye will host a conference call to discuss its financial
results for the second quarter on Wednesday, July 29, 2009, at
11:00 a.m. Eastern Time. Investors are invited to listen to the
conference call via the Internet, on either a live or replay basis,
at: http://www.videonewswire.com/event.asp?id=60543. Interested
parties may participate in the call by joining the conference at
(800) 289-0493 or (913) 981-5575 and referencing conference ID
6982489. An audio replay of the conference call also will be
available through August 3, 2009 by dialing (719) 457-0820 and
referencing conference ID 6982489. Buckeye Partners, L.P.
(http://www.buckeye.com/) is a publicly traded partnership that
owns and operates one of the largest independent refined petroleum
products pipeline systems in the United States in terms of volumes
delivered, with approximately 5,400 miles of pipeline. Buckeye
Partners, L.P. also owns 64 refined petroleum products terminals,
operates and maintains approximately 2,400 miles of pipeline under
agreements with major oil and chemical companies, owns a major
natural gas storage facility in northern California, and markets
refined petroleum products in certain of the geographic areas
served by its pipeline and terminal operations. The general partner
of Buckeye Partners, L.P. is owned by Buckeye GP Holdings L.P.
(NYSE:BGH). EBITDA, a measure not defined under generally accepted
accounting principles ("GAAP"), is defined by Buckeye as net income
attributable to Buckeye unitholders before income from discontinued
operations, interest and debt expense, income taxes, depreciation
and amortization. Adjusted EBITDA, which also is a non-GAAP
measure, is defined by Buckeye as EBITDA plus the difference
between the estimated annual land lease expense for Buckeye's
natural gas storage facility to be recorded under GAAP and the
actual cash to be paid for the annual land lease. Additionally, in
the second quarter of 2009, Buckeye's management redefined Adjusted
EBITDA to exclude the impairment expense of $72.5 million related
to its NGL pipeline and the reorganization expense of $28.1 million
related to its "best practices" initiative in order to evaluate the
results of Buckeye's operations on a consistent basis over multiple
time periods. This press release also includes discussion of net
income attributable to Buckeye's unitholders before special
charges, which is a non-GAAP measure derived by excluding from net
income attributable to Buckeye's unitholders charges to recognize
an asset impairment and for expenses related to an organizational
restructuring. EBITDA, Adjusted EBITDA, and net income attributable
to Buckeye's unitholders before special charges should not be
considered alternatives to net income, operating income, cash flow
from operations, or any other measure of financial performance
presented in accordance with GAAP. Because EBITDA and Adjusted
EBITDA exclude some items that affect net income attributable to
Buckeye's unitholders and these items may vary among other
companies, the EBITDA and Adjusted EBITDA data presented may not be
comparable to similarly titled measures at other companies.
Management uses Adjusted EBITDA to evaluate Buckeye's consolidated
operating performance and the operating performance of its
operating segments and to allocate resources and capital to the
operating segments. Additionally, Buckeye's management uses
Adjusted EBITDA to evaluate the viability of proposed projects, and
to determine overall rates of return on alternative investment
opportunities. Net income attributable to Buckeye's unitholders
before special charges is a useful measure for investors because it
allows comparison of Buckeye's core operations from period to
period. Buckeye believes that investors benefit from having access
to the same financial measures used by Buckeye's management. Please
see the reconciliation of EBITDA and Adjusted EBITDA to net income
attributable to Buckeye's unitholders, the most directly comparable
GAAP measure, in the attached under the heading "Adjusted EBITDA
reconciliation." In addition, please see the reconciliation of net
income attributable to Buckeye's unitholders before special charges
to net income attributable to Buckeye's unitholders, the most
directly comparable GAAP measure, in the attached under the heading
"GAAP reconciliation of revised net income allocated to limited
partners." This press release includes forward-looking statements
that we believe to be reasonable as of today's date. Such
statements are identified by use of the words "anticipates",
"believes", "estimates", "expects", "intends", "plans", "predicts",
"projects", "should", and similar expressions, and include
Buckeye's estimated annual savings as a result of its
reorganization. Actual results may differ significantly because of
risks and uncertainties that are difficult to predict and that may
be beyond the control of Buckeye. Among them are (1) changes in
laws or regulations to which we are subject, including those that
permit the treatment of us as a partnership for federal income tax
purposes, (2) terrorism, adverse weather conditions, environmental
releases, and natural disasters, (3) changes in the marketplace for
our products or services, such as increased competition, better
energy efficiency, or general reductions in demand, (4) adverse
regional or national economic conditions or adverse capital market
conditions, (5) shutdowns or interruptions at the source points for
the products we transport, store, or sell, (6) unanticipated
capital expenditures in connection with the construction, repair,
or replacement of our assets, (7) volatility in the price of
refined petroleum products and the value of natural gas storage
services, (8) nonpayment or nonperformance by our customers, and
(9) our ability to realize the efficiencies expected to result from
our recently announced reorganization. You should read our Annual
Report on Form 10-K and our most recent Quarterly Report on Form
10-Q for a more extensive list of factors that could affect
results. We undertake no obligation to revise our forward-looking
statements to reflect events or circumstances occurring after
today's date. BUCKEYE PARTNERS, L.P. CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per unit amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, --------
-------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues Product
sales $201,777 $346,436 $470,556 $587,482 Transportation and other
149,443 146,112 297,504 285,342 ------- ------- ------- -------
Total revenue 351,220 492,548 768,060 872,824 ------- -------
------- ------- Costs and expenses: Cost of product sales 193,440
341,591 444,116 578,203 Operating expenses 68,595 69,112 142,102
134,440 Depreciation and amortization 14,675 13,460 29,155 25,958
Asset impairment expense 72,540 - 72,540 - General and
administrative 8,365 9,717 16,439 17,423 Reorganization expense
28,113 - 28,113 - ------ --- ------ --- Total costs and expenses
385,728 433,880 732,465 756,024 ------- ------- ------- -------
Operating (loss) income (34,508) 58,668 35,595 116,800 -------
------ ------ ------- Other income (expense): Investment and equity
income 3,278 1,573 5,511 4,213 Interest and debt expense (16,061)
(18,021) (33,237) (35,955) Other income (expense) 20 20 (20) 37 ---
--- --- --- Total other expense (12,763) (16,428) (27,746) (31,705)
------- ------- ------- ------- (Loss) income from continuing
operations (47,271) 42,240 7,849 85,095 (Loss) income from
discontinued operations - (8) - 1,405 --- --- --- ----- Net (loss)
income (47,271) 42,232 7,849 86,500 Less: Net income attributable
to noncontrolling interest (1,100) (1,380) (2,460) (2,831) ------
------ ------ ------ Net (loss) income attributable to Buckeye
Partners, L.P. $(48,371) $40,852 $5,389 $83,669 ======== =======
====== ======= Amounts attributable to Buckeye Partners, L.P.
(Loss) income from continuing operations $(48,371) $40,860 $5,389
$82,264 (Loss) income from discontinued operations - (8) - 1,405
--- --- --- ----- Total $(48,371) $40,852 $5,389 $83,669 ========
======= ====== ======= Allocation of net income attributable to
Buckeye Partners, L.P. ------------------------ Net income (loss)
allocated to general partner: Income from continuing operations
$11,455 $6,869 $23,121 $14,171 ======= ====== ======= =======
(Loss) income from discontinued operations $- $(2) $- $423 === ===
=== ==== Net (loss) income allocated to limited partners: (Loss)
income from continuing operations $(59,826) $33,991 $(17,732)
$68,093 ======== ======= ======== ======= (Loss) income from
discontinued operations $- $(6) $- $982 === === === ==== Earnings
per limited partner unit-diluted: (Loss) income from continuing
operations $(1.17) $0.63 $(0.36) $1.32 Income from discontinued
operations - - - 0.03 --- --- --- ---- (Loss) earnings per limited
partner unit- diluted (a) $(1.17) $0.63 $(0.36) $1.35 ====== =====
====== ===== GAAP reconciliation of revised net income allocated to
limited partners: -------------------------------- Net (loss)
income as reported $(47,271) $7,849 Add: Asset Impairment expense
72,540 72,540 Add: Reorganization expense 28,113 28,113 Revised net
income attributable to noncontrolling interest (1,306) (2,666)
------ ------ Revised net income 52,076 105,836 Revised net income
allocated to general partner 11,931 23,597 ------ ------ Revised
income allocated to limited partners $40,145 $82,239 =======
======= Revised earnings per limited partner unit-diluted: Revised
income from continuing operations $0.78 $1.65 ===== ===== Weighted
average number of limited partner units outstanding: Basic 51,243
48,368 49,830 47,116 ====== ====== ====== ====== Diluted 51,355
48,394 49,942 47,144 ====== ====== ====== ====== (a) Due to the net
loss in the three and six months ended June 30, 2009, earnings per
limited partner unit was calculated using the basic weighted
average units outstanding as the effect of using diluted units
would be antidilutive. June 30, December 31, Key Balance Sheet
information: 2009 2008 ----------------- ---- ---- Cash and cash
equivalents $21,997 $58,843 Long-term debt 1,356,578 1,445,722
BUCKEYE PARTNERS, L.P. SELECTED FINANCIAL AND OPERATING DATA
(Financial data in thousands) (Unaudited) Three Months Ended Six
Months Ended June 30, June 30, 2009 2008 2009 2008 Revenue:
-------- Pipeline Operations $98,175 $98,887 $197,370 $195,277
Terminalling and Storage 29,429 27,114 60,072 54,746 Natural Gas
Storage 16,672 15,186 31,749 26,650 Energy Services 201,676 347,768
470,156 582,315 Other Operations 8,805 10,757 17,930 21,626
Intersegment eliminations (3,537) (7,164) (9,217) (7,790) ------
------ ------ ------ Total $351,220 $492,548 $768,060 $872,824
======== ======== ======== ======== Operating (loss) income:
------------------------ Pipeline Operations $(50,033) $38,953
$(5,117) $75,641 Terminalling and Storage 11,041 10,297 22,034
23,267 Natural Gas Storage 5,794 7,691 12,032 12,560 Energy
Services (1,480) (231) 4,932 1,495 Other Operations 170 1,958 1,714
3,837 --- ----- ----- ----- Total $(34,508) $58,668 $35,595
$116,800 ======== ======= ======= ======== Total costs and expenses
including depreciation and amortization, asset impairment and
reorganization) ------------------------------------ Pipeline
Operations $148,208 $59,934 $202,487 $119,636 Terminalling and
Storage 18,388 16,817 38,038 31,479 Natural Gas Storage 10,878
7,495 19,717 14,090 Energy Services 203,156 347,999 465,224 580,820
Other Operations 8,635 8,799 16,216 17,789 Intersegment
eliminations (3,537) (7,164) (9,217) (7,790) ------ ------ ------
------ Total $385,728 $433,880 $732,465 $756,024 ======== ========
======== ======== Depreciation and amortization:
------------------------------ Pipeline Operations $9,724 $9,365
$19,301 $18,613 Terminalling and Storage 2,019 1,516 3,885 3,004
Natural Gas Storage 1,345 1,702 2,926 2,750 Energy Services 1,063
444 2,122 734 Other Operations 524 433 921 857 --- --- --- ---
Total $14,675 $13,460 $29,155 $25,958 ======= ======= =======
======= Capital additions: ------------------ Pipeline Operations
$12,001 $13,844 Terminalling and Storage 10,662 7,217 Natural Gas
Storage 14,381 10,020 Energy Services 1,797 1,420 Other Operations
113 - --- --- Total $38,954 $32,501 ======= ======= Summary of
capital additions: ----------------------------- Sustaining and
capital expenditures $7,773 $8,067 Expansion and cost reduction
31,181 24,434 ------ ------ Total $38,954 $32,501 ======= =======
Operating data: --------------- Pipeline Throughput (b/d - 000s)
1,325.5 1,406.7 1,346.6 1,395.1 Pipeline Average Tariff
(Cents/bbl.) 72.2 67.7 70.9 65.7 Terminal Throughput (b/d - 000s)
489.4 554.0 505.1 538.1 Three Months Ended Six Months Ended June
30, June 30, Adjusted EBITDA reconciliation: 2009 2008 2009 2008
------------------------------- ---- ---- ---- ---- Net (loss)
income Attributable to Buckeye Partners, L.P. $(48,371) $40,852
$5,389 $83,669 Less: (Loss) income from discontinued operations -
(8) - 1,405 --- --- --- ----- Net (loss) income from continuing
operations attributable to Buckeye Partners, L.P. (48,371) 40,860
5,389 82,264 Interest and debt expense 16,061 18,021 33,237 35,955
Income tax expense 63 198 128 426 Depreciation and amortization
14,675 13,460 29,155 25,958 ------ ------ ------ ------ EBITDA
(17,572) 72,539 67,909 144,603 Non-cash deferred lease expense
1,125 754 2,250 1,301 Asset impairment expense 72,540 - 72,540 -
Reorganization expense 28,113 - 28,113 - ------ --- ------ ---
Adjusted EBITDA $84,206 $73,293 $170,812 $145,904 ======= =======
======== ======== Adjusted EBITDA by Operating Segment:
------------------- Pipeline Operations $57,942 $48,984 $113,755
$96,557 Terminalling and Storage 15,465 11,841 28,290 26,340
Natural Gas Storage 8,556 10,165 17,514 16,642 Energy Services 554
186 8,032 2,181 Other Operations 1,689 2,117 3,221 4,184 -----
----- ----- ----- Total $84,206 $73,293 $170,812 $145,904 =======
======= ======== ======== DATASOURCE: Buckeye Partners, L.P.
CONTACT: Stephen R. Milbourne, Manager, Investor Relations, +1-800
422-2825, Web Site: http://www.buckeye.com/
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