HOUSTON, TX, Nov. 2, 2009 (Marketwire) --
HOUSTON, TX -- (Marketwire) -- 11/02/09 -- Buckeye Partners, L.P. ("Buckeye") (NYSE: BPL) today reported its financial results for the third quarter of 2009. Net income attributable to Buckeye's unitholders for the third quarter of 2009 was $57.9 million, or $0.89 per limited partner ("LP") unit, compared to $46.6 million, or $0.75 per LP unit, for the third quarter of 2008. Net income attributable to Buckeye's unitholders before special charges (as defined below) for the third quarter of 2009 was $58.9 million, or $0.90 per LP unit. Buckeye recorded special charges of $1.0 million for organizational restructuring in the third quarter of 2009.
Revenue in the third quarter of 2009 was $423.4 million compared to revenue in the third quarter of 2008 of $496.2 million. Buckeye's Adjusted EBITDA (as defined below) for the third quarter of 2009 was $94.4 million compared to $83.1 million for the third quarter of 2008. Operating income for the third quarter of 2009 was $76.0 million compared to operating income of $64.5 million for the third quarter of 2008. Operating income before special charges for the third quarter of 2009 was $77.0 million.
For the first nine months of 2009, net income attributable to Buckeye's unitholders was $63.3 million, or $0.55 per LP unit, compared to $130.3 million, or $2.10 per LP unit, for the first nine months of 2008. Net income attributable to Buckeye's unitholders before special charges for the first nine months of 2009 was $164.7 million, or $2.55 per LP unit. Buckeye recorded special charges during the second and third quarters of 2009 to recognize an asset impairment of $72.5 million and $29.1 million for expenses related to an organizational restructuring.
For the first nine months of 2009, revenue was $1.19 billion compared to $1.37 billion for the first nine months of 2008. Buckeye's Adjusted EBITDA for the first nine months of 2009 was $265.2 million compared to $229.0 million in the same period last year. Operating income for the first nine months of 2009 was $111.6 million compared to operating income of $181.3 million for the first nine months of 2008. Operating income before special charges for the first nine months of 2009 was $213.2 million.
"Buckeye made substantial progress in the third quarter of 2009, both operationally and financially," said Forrest E. Wylie, Chairman and CEO of Buckeye's general partner. "Although difficult economic conditions reduced our product volumes, we achieved significant growth in Adjusted EBITDA, our primary measure of success. We generated an increase of 13.7 percent in Adjusted EBITDA over the third quarter of 2008, when demand was stronger."
Wylie also said further improvements are expected as the company continues to realize the benefits of implementing its best practices initiative. "Our goal is to become the best-in-class asset manager by reaching the highest asset utilization at the lowest cost per unit without compromising our commitment to safe and environmentally responsible operations," Wylie said. "In addition to being on track to achieve forecasted annualized savings of $18 million to $22 million, the best practices initiative is helping to create a more commercial culture by fostering accountability and entrepreneurship throughout the organization. During the third quarter of 2009, we realized $2.7 million in savings from these initiatives. A key strategy for increasing optimization of the company's pipelines, terminals, and storage systems is the continued growth of Buckeye's Energy Services group, which is helping to improve utilization rates on Buckeye's underutilized pipelines and terminals through its marketing efforts in areas served by those assets."
The recently announced agreement with ConocoPhillips to acquire two refined-product pipelines and three associated storage and distribution terminals will give Buckeye increased capacity and access to more markets in the Midwest. When the transaction closes, which is expected to occur before the end of 2009, Buckeye will gain more than 300 miles of pipelines between the St. Louis and Chicago areas, 2.3 million barrels of storage capacity and ethanol blending facilities.
"The combined footprint will increase the commercial value of our assets to our customers by offering enhanced distribution connectivity and flexible storage capabilities," Wylie said.
The Board of Directors of Buckeye GP LLC, the general partner of Buckeye, declared a regular quarterly partnership cash distribution of $0.925 per LP unit, payable on November 30, 2009 to unitholders of record on November 12, 2009. This cash distribution represents a quarterly increase in the distribution of $0.0125 per LP unit and an annualized cash distribution level of $3.70 per LP unit. This is the 91st consecutive quarterly cash distribution paid by Buckeye.
Buckeye will host a conference call with members of executive management on Monday, November 2, 2009, at 11:00 a.m. Eastern Time. To access the live Webcast of the call, go to http://www.visualwebcaster.com/event.asp?id=63429 10 minutes prior to its start. A replay will be archived and available at this link for 14 days. Interested parties may participate in the call by dialing 800-406-6465 at least 10 minutes prior to the start and referencing conference ID 4693347.
Buckeye Partners, L.P. (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 U.S. generally accepted accounting principles ("GAAP"), is defined by Buckeye as net income attributable to Buckeye's unitholders from continuing operations before interest expense, income taxes and depreciation and amortization. The EBITDA measure eliminates the significant level of non-cash depreciation and amortization expense that results from the capital-intensive nature of Buckeye's businesses and from intangible assets recognized in business combinations. In addition, EBITDA is unaffected by Buckeye's capital structure due to the elimination of interest expense and income taxes. Adjusted EBITDA, which also is a non-GAAP measure, is defined by Buckeye as EBITDA plus non-cash deferred lease expense, which is the difference between the estimated annual land lease expense for Buckeye's natural gas storage facility in the Natural Gas Storage segment to be recorded under GAAP and the actual cash to be paid for such annual land lease. In addition, Buckeye's management has excluded the impairment expense related to Buckeye's approximately 350-mile natural gas liquids pipeline that runs from Wattenberg, Colorado to Bushton, Kansas (the "Buckeye NGL Pipeline") and reorganization expense from Adjusted EBITDA in order to evaluate the results of Buckeye's operations on a comparative basis over multiple 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 the Buckeye NGL Pipeline impairment expense and for expenses related to an organizational restructuring, and operating income before special charges, which is a non-GAAP measure derived by excluding from operating income charges to recognize the Buckeye NGL Pipeline impairment expense and for expenses related to an organizational restructuring. EBITDA, Adjusted EBITDA, net income attributable to Buckeye's unitholders before special charges, and operating income 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.
The EBITDA and Adjusted EBITDA data presented may not be comparable to similarly titled measures at other companies 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. Management of Buckeye uses Adjusted EBITDA to evaluate the consolidated operating performance and the operating performance of the business segments and to allocate resources and capital to the business. In addition, Buckeye's management uses Adjusted EBITDA as a performance measure 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 and operating income before special charges are useful measures for investors because they allow comparison of Buckeye's core operations from period to period.
Distributable cash flow, which is a financial measure included in the schedules to this press release, is another measure not defined under GAAP that is defined by Buckeye as net income attributable to Buckeye unitholders from continuing operations, excluding depreciation and amortization, the Buckeye NGL Pipeline impairment expense and Buckeye's reorganization expense. In addition, distributable cash flow excludes the deferred land lease expense for Buckeye's Natural Gas Storage segment and the senior administrative charge, which has been waived indefinitely, both of which are non-cash items, and is reduced by maintenance capital expenditures.
