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8-K - FORM 8-K - BUCKEYE PARTNERS, L.P. | h82241e8vk.htm |
Exhibit 99.1
Contact:
|
Investor Relations | |
Irelations@buckeye.com | ||
(800) 422-2825 |
BUCKEYE PARTNERS, L.P. REPORTS 2011 FIRST-QUARTER EARNINGS RESULTS;
INCREASES QUARTERLY CASH DISTRIBUTION
INCREASES QUARTERLY CASH DISTRIBUTION
HOUSTON, May 6, 2011 Buckeye Partners, L.P. (Buckeye) (NYSE: BPL) today reported net income
attributable to Buckeyes unitholders for the first quarter of 2011 of $66.5 million, or $0.79 per
unit, compared to net income attributable to Buckeyes unitholders for the first quarter of 2010 of
$11.3 million, or $0.56 per unit. The diluted weighted average number of units outstanding in the
first quarter of 2011 was 84.0 million compared to 20.0 million in the first quarter of 2010. The
increase in the number of units reported for the first quarter of this year versus the first
quarter of 2010 was significantly impacted by Buckeyes merger with Buckeye GP Holdings L.P. in the
fourth quarter of 2010, and the issuance of units in connection with the acquisition of Bahamas Oil
Refining Company International (BORCO) in the first quarter of 2011.
Buckeyes Adjusted EBITDA (as defined below) for the first quarter of 2011 was $122.2 million
compared with Adjusted EBITDA of $89.5 million for the first quarter of 2010. Operating income for
the first quarter of 2011 was $92.6 million, an increase of 33.2 percent compared to $69.5 million
for the prior year period.
Buckeyes overall operating results for the first quarter of 2011 were strong, stated Forrest E.
Wylie, Chairman and CEO. Adjusted EBITDA, our primary measure of performance, increased by 36.6
percent year over year. Although the primary driver of the increase is attributable to recent
acquisitions, we saw a 7.9 percent year over year increase in the Adjusted EBITDA of our Pipelines
& Terminals segment, which largely represents organic growth.
As the Buckeye organization began celebrating its 125th anniversary of continuous
operations, we successfully closed our largest acquisition to date, BORCO, a premier marine
terminal in the Bahamas that increased our total storage capacity to over 53 million barrels,
continued Wylie. The acquisition allows Buckeye to play an important role in international product
flows. In the first quarter, we also announced an agreement with affiliates of BP North America to
acquire approximately 1,000 miles of pipeline and 33 liquid petroleum terminals, adding
approximately 10 million barrels of storage capacity to our portfolio of assets. We are working to
integrate and optimize our recent acquisitions and to continue to identify growth opportunities
across our entire system.
Buckeyes business segments have been realigned as of the first quarter of 2011 to reflect recent
changes in our operations. Buckeye will continue to report results for five business segments, but
the former Pipeline Operations segment and the former Terminalling & Storage segment are now
combined in the Pipelines & Terminals segment and the results from BORCO and our terminal in
Yabucoa, Puerto Rico will be reported in a new International Operations business segment.
- More -
BPL 2011 First-Quarter Earnings Results | Page 2 |
Buckeye also announced today that its general partner declared a cash distribution of $1.00 per
limited partner unit for the quarter ended March 31, 2011. Class B unitholders will not receive a
distribution of cash, but instead will be issued additional Class B units pursuant to Buckeyes
partnership agreement. The distribution will be payable on May 31, 2011 to unitholders of record
on May 16, 2011. This cash distribution is the 28th consecutive increase in the
quarterly cash distribution and represents a 5.3 percent increase over the $0.95 per limited
partner unit distribution declared for the first quarter of 2010. Buckeye has paid cash
distributions in each quarter since its formation in 1986.
Buckeye will host a conference call with members of executive management today, May 6, 2011, at
10:00 a.m. Eastern Time. To access the live Webcast of the call, go to
http://www.visualwebcaster.com/event.asp?id=78523 10 minutes prior to its start. Interested
parties may participate in the call by dialing 866-226-1792. A replay will be
archived and available at this link until June 6, 2011, and the replay also may be accessed by
dialing 800-408-3053 and entering passcode 6360631.
Buckeye also announced today that Pieter Bakker was appointed to serve as a director of its general
partner on May 5, 2011. With the addition of Mr. Bakker, the Board of Directors will have eight
members. Forrest E. Wylie, Chairman and CEO, stated We are extremely pleased to announce that
Pieter has joined our Board of Directors. He has spent more than 40 years in the international
terminalling business, including as Chairman of BORCO from March 2009 until February 2011.
Pieters breadth of experience and knowledge of the industry uniquely qualify him to serve on our
Board.
Buckeye Partners, L.P. 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 also owns 69 liquid petroleum
products terminals with aggregate storage capacity of approximately 53 million barrels, operates
approximately 2,700 miles of pipeline under agreements with major oil and chemical companies, owns
a high-performance natural gas storage facility in Northern California, and markets refined
petroleum products in certain regions served by its pipeline and terminal operations. Buckeyes
flagship marine terminal in the Bahamas, BORCO, is one of the largest oil and petroleum products
storage facilities in the world, serving the international markets as a premier global logistics
hub. Buckeye is celebrating its 125th anniversary as a midstream energy company in
2011. More information concerning Buckeye can be found at www.buckeye.com.
* * * * *
EBITDA, a measure not defined under U.S. generally accepted accounting principles (GAAP),
is defined by Buckeye as net income attributable to Buckeyes unitholders before interest and debt
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 Buckeyes businesses and from intangible assets recognized in business
combinations. In addition, EBITDA is unaffected by Buckeyes capital structure due to the
elimination of interest and debt expense and income taxes. Adjusted EBITDA, which also is a
non-GAAP measure, is defined by Buckeye as EBITDA, plus: (i) non-cash deferred lease expense, which
is the difference between the estimated annual land lease expense for Buckeyes 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, (ii) non-cash unit-based compensation expense, and (iii) income
attributable to noncontrolling interests related to Buckeye for periods prior to the merger of
Buckeye and Buckeye GP
BPL 2011 First-Quarter Earnings Results | Page 3 |
Holdings L.P. (the Merger); minus amortization of unfavorable storage contracts acquired in the
BORCO acquisition. The EBITDA and Adjusted EBITDA data presented may not be directly comparable to
similarly titled measures at other companies because EBITDA and Adjusted EBITDA exclude some items
that affect net income attributable to Buckeyes unitholders, and these measures may be defined
differently by 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 segments. In addition, Buckeyes 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.
Distributable cash flow, which is a financial measure included in the schedules to this press
release, is another measure not defined under GAAP. Distributable cash flow is defined by Buckeye
as net income attributable to Buckeyes unitholders, plus: (i) depreciation and amortization
expense, (ii) noncontrolling interests related to Buckeye that were eliminated as a result of the
Merger, (iii) deferred lease expense for Buckeyes Natural Gas Storage segment, and (iv)
unit-based compensation expense (all of which are non-cash expense); minus (i)
maintenance capital expenditures and (ii) amortization of unfavorable storage contracts acquired in
the BORCO acquisition. Buckeyes management believes that distributable cash flow is useful to
investors because it removes non-cash items from net income and provides a clearer picture of
Buckeyes cash available for distribution to its unitholders.
EBITDA, Adjusted EBITDA, and distributable cash flow 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.
Buckeye believes that investors benefit from having access to the same financial measures used by
Buckeyes management. Further, Buckeye believes that these measures are useful to investors
because they are one of the bases for comparing Buckeyes operating performance with that of other
companies with similar operations, although Buckeyes measures may not be directly comparable to
similar measures used by other companies. Please see the attached reconciliations of each of
EBITDA, Adjusted EBITDA and distributable cash flow to net income attributable to Buckeyes
unitholders.
* * * * *
This press release includes forward-looking statements that we believe to be reasonable as of
todays date. Such statements are identified by use of the words anticipates, believes,
estimates, expects, intends, plans, predicts, projects, should, and similar
expressions. Actual results may differ significantly because of risks and uncertainties that are
difficult to predict and that may be beyond our control. Among them are (1) changes in federal,
state, local, and foreign 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, including hurricanes, 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, national, or
international economic conditions, adverse capital market conditions, and adverse political
developments, (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 integrate acquired assets with our existing assets and to realize anticipated cost
savings and other efficiencies. You should read our filings with the U.S. Securities and Exchange
Commission, including our Annual Report on Form 10-K/A for the year ended December 31, 2010, 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 todays date.
# # # #
BPL 2011 First-Quarter Earnings Results | Page 4 |
BUCKEYE PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Product sales |
$ | 1,037,556 | $ | 568,170 | ||||
Transportation and other services |
214,980 | 163,004 | ||||||
Total revenue |
1,252,536 | 731,174 | ||||||
Costs and expenses: |
||||||||
Cost of product sales and natural gas storage services |
1,037,962 | 569,737 | ||||||
Operating expenses |
80,264 | 66,583 | ||||||
Depreciation and amortization |
26,241 | 14,528 | ||||||
General and administrative |
15,506 | 10,835 | ||||||
Total costs and expenses |
1,159,973 | 661,683 | ||||||
Operating income |
92,563 | 69,491 | ||||||
Other income (expense): |
||||||||
Earnings from equity investments |
3,347 | 2,652 | ||||||
Interest and debt expense |
(28,497 | ) | (21,656 | ) | ||||
Other income |
400 | 155 | ||||||
Total other expense |
(24,750 | ) | (18,849 | ) | ||||
Net income |
67,813 | 50,642 | ||||||
Less: net income attributable to noncontrolling interests |
(1,320 | ) | (39,372 | ) | ||||
Net income attributable to Buckeye Partners, L.P. |
$ | 66,493 | $ | 11,270 | ||||
Earnings per unit: |
||||||||
Basic |
$ | 0.79 | $ | 0.56 | ||||
Diluted |
$ | 0.79 | $ | 0.56 | ||||
Weighted average number of units outstanding: |
||||||||
Basic |
83,669 | 19,952 | ||||||
Diluted |
83,954 | 19,952 | ||||||
BPL 2011 First-Quarter Earnings Results | Page 5 |
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
(In thousands)
(Unaudited)
SELECTED FINANCIAL AND OPERATING DATA
(In thousands)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Revenue: |
||||||||
Pipelines & Terminals |
$ | 144,206 | $ | 138,908 | ||||
International Operations |
45,075 | | ||||||
Natural Gas Storage |
19,604 | 25,406 | ||||||
Energy Services |
1,051,312 | 568,202 | ||||||
Development & Logistics |
9,591 | 7,515 | ||||||
Intersegment eliminations |
(17,252 | ) | (8,857 | ) | ||||
Total revenue |
$ | 1,252,536 | $ | 731,174 | ||||
Total costs and expenses: (1) |
||||||||
Pipelines & Terminals |
$ | 72,879 | $ | 70,418 | ||||
International Operations |
26,346 | | ||||||
Natural Gas Storage |
20,004 | 21,955 | ||||||
Energy Services |
1,050,045 | 571,599 | ||||||
Development & Logistics |
7,951 | 6,568 | ||||||
Intersegment eliminations |
(17,252 | ) | (8,857 | ) | ||||
Total costs and expenses |
$ | 1,159,973 | $ | 661,683 | ||||
Depreciation and amortization: |
||||||||
Pipelines & Terminals |
$ | 12,561 | $ | 11,269 | ||||
International Operations |
10,395 | | ||||||
Natural Gas Storage |
1,716 | 1,641 | ||||||
Energy Services |
1,235 | 1,195 | ||||||
Development & Logistics |
334 | 423 | ||||||
Total depreciation and amortization |
$ | 26,241 | $ | 14,528 | ||||
Operating income: |
||||||||
Pipelines & Terminals |
$ | 71,327 | $ | 68,490 | ||||
International Operations |
18,729 | | ||||||
Natural Gas Storage |
(400 | ) | 3,451 | |||||
Energy Services |
1,267 | (3,397 | ) | |||||
Development & Logistics |
1,640 | 947 | ||||||
Total operating income |
$ | 92,563 | $ | 69,491 | ||||
Adjusted EBITDA: |
||||||||
Pipelines & Terminals |
$ | 90,120 | $ | 83,488 | ||||
International Operations |
25,507 | | ||||||
Natural Gas Storage |
2,452 | 6,384 | ||||||
Energy Services |
2,759 | (1,552 | ) | |||||
Development & Logistics |
1,401 | 1,139 | ||||||
Adjusted EBITDA |
$ | 122,239 | $ | 89,459 | ||||
Capital additions: (2) |
||||||||
Pipelines & Terminals |
$ | 14,629 | $ | 7,598 | ||||
International Operations |
21,703 | | ||||||
Natural Gas Storage |
1,482 | 1,483 | ||||||
Energy Services |
176 | 1,705 | ||||||
Development & Logistics |
43 | 177 | ||||||
Total capital additions |
$ | 38,033 | $ | 10,963 | ||||
Summary of capital additions: (2) |
||||||||
Maintenance capital expenditures |
$ | 7,473 | $ | 3,270 | ||||
Expansion and cost reduction |
30,560 | 7,693 | ||||||
Total capital additions |
$ | 38,033 | $ | 10,963 | ||||
(1) Includes depreciation and amortization.
(2) Amounts exclude accruals for capital expenditures.
March 31, | December 31, | |||||||
Key Balance Sheet information: | 2011 | 2010 | ||||||
Cash and cash equivalents |
$ | 66,430 | $ | 13,626 | ||||
Long-term debt, total |
2,404,071 | 1,519,393 | ||||||
Credit Facility |
335,000 | 98,000 |
BPL 2011 First-Quarter Earnings Results | Page 6 |
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA Continued
(Unaudited)
SELECTED FINANCIAL AND OPERATING DATA Continued
(Unaudited)
| |
Three Months Ended
March 31,
Three Months Ended
March 31,
2011 2010
Operating data: |
||||||||
Pipelines & Terminals throughput (b/d - 000s): |
||||||||
Pipelines: |
||||||||
Gasoline |
602.9 | 608.9 | ||||||
Jet fuel |
326.5 | 322.3 | ||||||
Diesel fuel |
240.5 | 227.5 | ||||||
Heating oil |
110.6 | 113.9 | ||||||
LPGs |
17.2 | 20.5 | ||||||
Other products |
5.3 | 0.8 | ||||||
Total pipelines throughput |
1,303.0 | 1,293.9 | ||||||
Terminals throughput (b/d - 000s): |
||||||||
Products throughput |
535.5 | 556.3 | ||||||
Pipeline Average Tariff (Cents/bbl.) |
73.6 | 71.8 | ||||||
International Operations (b/d - 000s): |
||||||||
Products throughput |
533.9 | | ||||||
Energy Services (in millions of gallons): |
||||||||
Sales volumes |
381.5 | 266.9 | ||||||
BPL 2011 First-Quarter Earnings Results | Page 7 |
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
Non-GAAP Reconciliations
(In thousands, except per unit amounts and coverage ratio)
(Unaudited)
SELECTED FINANCIAL AND OPERATING DATA
Non-GAAP Reconciliations
(In thousands, except per unit amounts and coverage ratio)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 2010 | ||||||||
Adjusted EBITDA: |
||||||||
Net income attributable to Buckeye Partners, L.P. |
$ | 66,493 | $ | 11,270 | ||||
Interest and debt expense |
28,497 | 21,656 | ||||||
Income tax expense (benefit) |
(176 | ) | (18 | ) | ||||
Depreciation and amortization |
26,241 | 14,528 | ||||||
EBITDA |
121,055 | 47,436 | ||||||
Net income attributable to noncontrolling interests
affected by Merger (for periods prior to Merger) (1) |
| 39,134 | ||||||
Amortization of unfavorable storage contracts |
(1,932 | ) | | |||||
Non-cash deferred lease expense |
1,030 | 1,059 | ||||||
Non-cash unit-based compensation expense |
2,086 | 1,830 | ||||||
Adjusted EBITDA |
$ | 122,239 | $ | 89,459 | ||||
Distributable cash flow: |
||||||||
Net income attributable to Buckeye Partners, L.P. |
$ | 66,493 | $ | 11,270 | ||||
Depreciation and amortization |
26,241 | 14,528 | ||||||
Net income attributable to noncontrolling interests
affected by Merger (for periods prior to Merger) (1) |
| 39,134 | ||||||
Non-cash deferred lease expense |
1,030 | 1,059 | ||||||
Non-cash unit-based compensation expense |
2,086 | 1,830 | ||||||
Amortization of unfavorable storage contracts |
(1,932 | ) | | |||||
Maintenance capital expenditures |
(7,473 | ) | (3,270 | ) | ||||
Distributable cash flow |
$ | 86,445 | $ | 64,551 | ||||
Distributions for Coverage Ratio (2) |
$ | 80,630 | $ | 60,968 | ||||
Coverage Ratio |
1.07 | 1.06 | ||||||
(1) | Represents merger between Buckeye Partners, L.P. and Buckeye GP Holdings L.P. in November 2010. | |
(2) | Represents cash distributions declared for respective periods. 2011 amount reflects estimated distributions for limited partner units outstanding as of March 31, 2011. |