(Source: PRNewswire-FirstCall)
BREINIGSVILLE, Pa., July 20 /PRNewswire-FirstCall/ -- Buckeye Partners, L.P. ("Buckeye") today announced that it has completed a comprehensive "best practices" review of its business. As a result of this review, Buckeye is implementing organizational changes that are expected to result in annualized savings of $18-22 million, which should be fully realized beginning in 2010. An aggregate charge of $30-34 million will be recorded related to this reorganization. Buckeye expects to record $22-30 million of expense in the second quarter with the balance being recognized in the second half of 2009. Aggregate cash costs are expected to be $32-36 million. These charges primarily represent expected severance payments, early retirement benefits, and other employee-related costs. These organizational changes will result in a workforce reduction of approximately 260 employees, or nearly 25 percent of Buckeye's workforce.
"Buckeye has dedicated and committed employees that have been integral to our success, and it is very difficult to take actions that impact many of them and their families," stated Forrest E. Wylie, Chairman and CEO of Buckeye's general partner. "However, we must continuously challenge ourselves, particularly in the current economic environment, to ensure that we are positioned to generate the highest utilization of our assets at the lowest cost. Buckeye's new streamlined organizational structure is expected to enhance our competitive market position through improved customer service, higher productivity, and lower operating costs, and should position us to respond more rapidly to changing needs in the markets we serve."
"It is important to emphasize that, although our organizational structure has changed, our core commitments have not," Wylie said. "Buckeye's absolute dedication to safe and environmentally responsible operations is unchanged, and the organizational changes being implemented will strengthen our commitment to asset integrity and quality assurance."
Separately, Buckeye announced that it has completed a strategic review of certain of its operating assets and has determined that its pipeline system that transports natural gas liquids from Colorado to Kansas is non-core to its ongoing operations. Buckeye continues to evaluate various strategic alternatives, including actively marketing this asset. As a result of this analysis, Buckeye will record a non-cash charge of $65-75 million in the second quarter of 2009 to write the asset down to its fair value.
Buckeye will host a conference call to discuss the reorganization and impairment charge on Tuesday, July 21, 2009, at 11:00 a.m. Eastern time.
