Attached files
file | filename |
---|---|
8-K - FORM 8-K - BUCKEYE PARTNERS, L.P. | h84058e8vk.htm |
Exhibit 99.1
News Release NYSE: BPL |
Buckeye Partners, L.P. One Greenway Plaza Suite 600 Houston, TX 77046 |
|||
Contact: | Investor Relations Irelations@buckeye.com (800) 422-2825 |
BUCKEYE PARTNERS, L.P. REPORTS 2011 SECOND-QUARTER EARNINGS RESULTS; INCREASES QUARTERLY CASH
DISTRIBUTION
DISTRIBUTION
HOUSTON, August 5, 2011 Buckeye Partners, L.P. (Buckeye) (NYSE: BPL) today reported net income
attributable to Buckeyes unitholders for the second quarter of 2011 of $92.0 million, or $1.00 per
unit, compared to net income attributable to Buckeyes unitholders for the second quarter of 2010
of $11.5 million, or $0.58 per unit. The diluted weighted average number of units outstanding in
the second quarter of 2011 was 92.1 million compared to 20.0 million in the second quarter of 2010.
The increase in the number of units reported for the second quarter of this year versus the second
quarter of 2010 was significantly impacted by Buckeyes merger with Buckeye GP Holdings L.P. in the
fourth quarter of 2010. The number of units also increased due to the issuance of units in
connection with the acquisition of Bahamas Oil Refining Company International (BORCO) in the
first quarter of 2011, and a limited partner unit offering in the second quarter of 2011.
Buckeyes Adjusted EBITDA (as defined below) for the second quarter of 2011 was $117.6 million
compared with Adjusted EBITDA of $91.7 million for the second quarter of 2010. Operating income
for the second quarter of 2011 was $85.9 million, an increase of 19.5 percent compared with $71.9
million for the prior year period.
Buckeyes Adjusted EBITDA, our primary measure of performance, increased by 28.2 percent year over
year, largely driven by contributions from recent acquisitions, stated Forrest E. Wylie, Chairman
and CEO. The positive impact from our recent acquisitions and the solid performance of our legacy
pipeline and terminalling assets was partially offset by approximately $8 million of acquisition
and integration expenses incurred during the second quarter, as well as an $8.8 million decrease in
the Natural Gas Storage segments Adjusted EBITDA period over period as a result of extreme
weakness in the natural gas storage markets.
During the second quarter of 2011, Buckeye acquired approximately 650 miles of pipeline and 33
liquid petroleum products terminals from BP North America, Inc. and its affiliates, adding
approximately 10 million barrels of liquid petroleum product storage capacity, for approximately
$165 million. The pipelines are located in the Midwest and the terminals are spread throughout the
Northeast, Midwest, Southeast, and California.
In July of this year, Buckeye purchased a liquid petroleum products terminal in Bangor, Maine as
well as a 124-mile pipeline that connects the Bangor terminal to a marine terminal in South
Portland, Maine. Buckeye purchased the South Portland terminal through a 50/50 joint venture with
Irving Oil Terminals Inc. Buckeye paid approximately $23.5 million for its ownership stake in
these assets.
- More -
BPL 2011 Second-Quarter Earnings Results | Page 2 |
This years acquisitions provide both significant geographic diversity and a platform for us to
build upon through identifying operating efficiencies with existing assets, synergies with
potential new acquisitions, and new organic growth projects, continued Wylie. We are positioning
Buckeye to continue to achieve favorable financial results in the second half of this year and into
2012. Recent additions to our overall footprint provide significant opportunities for earnings
growth as we implement our best practices model and move past the transition phase to achieve
expected Adjusted EBITDA run-rate levels.
During the second quarter, Buckeye raised over $300 million in proceeds from a primary offering of
5.5 million limited partner units. Buckeye also benefited from a gain of $34.1 million on the sale
of a non-operating equity interest in West Texas LPG Pipeline Limited Partnership (WTLPG).
Buckeye also announced today that its general partner declared a cash distribution of $1.0125 per
limited partner unit for the quarter ended June 30, 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 August 31, 2011 to unitholders of
record on August 15, 2011. This cash distribution is the 29th consecutive increase in
the quarterly cash distribution and represents a 5.2 percent increase over the $0.9625 per limited
partner unit distribution declared for the second 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, August 5, 2011, at
11:00 a.m. Eastern Time. To access the live Webcast of the call, go to
http://www.visualwebcaster.com/event.asp?id=81163 10 minutes prior to its start. Interested
parties may participate in the call by dialing 888-340-9761. A replay will be
archived and available at this link until September 6, 2011, and the replay also may be accessed by
dialing 800-408-3053 and entering passcode 6360631.
Buckeye Partners, L.P. (NYSE: BPL) is a publicly traded partnership that owns and operates one of
the largest independent liquid petroleum products pipeline systems in the United States in terms of
volumes delivered, with over 6,000 miles of pipeline. Buckeye also owns more than 100 liquid
petroleum products terminals with aggregate storage capacity of approximately 64 million barrels,
operates approximately 3,400 miles of pipeline under agreements with major oil and chemical
companies, owns a high-performance natural gas storage facility in Northern California, and markets
liquid 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
BPL 2011 Second-Quarter Earnings Results | Page 3 |
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 Holdings L.P. (the Merger); less: (i) amortization
of unfavorable storage contracts acquired in the BORCO acquisition; and (ii) gain on the sale of
our equity investment in WTLPG. 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); less: (i)
maintenance capital expenditures; (ii) amortization of unfavorable storage contracts acquired in
the BORCO acquisition; and (iii) gain on the sale of our equity investment in WTLPG. 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
BPL 2011 Second-Quarter Earnings Results | Page 4 |
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 and our most recently filed 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 todays date.
####
BPL 2011 Second-Quarter Earnings Results | Page 5 |
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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Product sales |
$ | 853,706 | $ | 501,744 | $ | 1,891,262 | $ | 1,069,914 | ||||||||
Transportation and other services |
223,386 | 165,532 | 438,366 | 328,536 | ||||||||||||
Total revenue |
1,077,092 | 667,276 | 2,329,628 | 1,398,450 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sales and natural gas storage services |
854,341 | 498,645 | 1,892,303 | 1,068,382 | ||||||||||||
Operating expenses |
89,869 | 68,769 | 170,133 | 135,352 | ||||||||||||
Depreciation and amortization |
29,756 | 14,669 | 55,997 | 29,197 | ||||||||||||
General and administrative |
17,191 | 13,254 | 32,697 | 24,089 | ||||||||||||
Total costs and expenses |
991,157 | 595,337 | 2,151,130 | 1,257,020 | ||||||||||||
Operating income |
85,935 | 71,939 | 178,498 | 141,430 | ||||||||||||
Other income (expense): |
||||||||||||||||
Earnings from equity investments |
2,034 | 2,764 | 5,381 | 5,416 | ||||||||||||
Gain on sale of equity investment |
34,112 | | 34,112 | | ||||||||||||
Interest and debt expense |
(28,596 | ) | (21,350 | ) | (57,093 | ) | (43,006 | ) | ||||||||
Other income |
107 | 85 | 507 | 240 | ||||||||||||
Total other income (expense) |
7,657 | (18,501 | ) | (17,093 | ) | (37,350 | ) | |||||||||
Net income |
93,592 | 53,438 | 161,405 | 104,080 | ||||||||||||
Less: net income attributable to noncontrolling
interests |
(1,571 | ) | (41,931 | ) | (2,891 | ) | (81,303 | ) | ||||||||
Net income attributable to Buckeye Partners, L.P. |
$ | 92,021 | $ | 11,507 | $ | 158,514 | $ | 22,777 | ||||||||
Earnings per unit: |
||||||||||||||||
Basic |
$ | 1.00 | $ | 0.58 | $ | 1.81 | $ | 1.14 | ||||||||
Diluted |
$ | 1.00 | $ | 0.58 | $ | 1.80 | $ | 1.14 | ||||||||
Weighted average number of units outstanding: |
||||||||||||||||
Basic |
91,743 | 19,952 | 87,728 | 19,952 | ||||||||||||
Diluted |
92,088 | 19,952 | 88,042 | 19,952 | ||||||||||||
BPL 2011 Second-Quarter Earnings Results | Page 6 |
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
(In thousands)
(Unaudited)
SELECTED FINANCIAL AND OPERATING DATA
(In thousands)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue: |
||||||||||||||||
Pipelines & Terminals |
$ | 149,110 | $ | 140,107 | $ | 293,316 | $ | 279,015 | ||||||||
International Operations |
52,990 | | 98,065 | | ||||||||||||
Natural Gas Storage |
14,085 | 21,249 | 33,689 | 46,655 | ||||||||||||
Energy Services |
864,125 | 501,949 | 1,915,437 | 1,070,151 | ||||||||||||
Development & Logistics |
10,580 | 10,785 | 20,171 | 18,300 | ||||||||||||
Intersegment eliminations |
(13,798 | ) | (6,814 | ) | (31,050 | ) | (15,671 | ) | ||||||||
Total revenue |
$ | 1,077,092 | $ | 667,276 | $ | 2,329,628 | $ | 1,398,450 | ||||||||
Total costs and expenses: (1) |
||||||||||||||||
Pipelines & Terminals |
$ | 81,318 | $ | 71,658 | $ | 154,197 | $ | 142,076 | ||||||||
International Operations |
33,018 | | 59,364 | | ||||||||||||
Natural Gas Storage |
19,703 | 17,947 | 39,707 | 39,902 | ||||||||||||
Energy Services |
861,867 | 502,420 | 1,911,912 | 1,074,019 | ||||||||||||
Development & Logistics |
9,049 | 10,126 | 17,000 | 16,694 | ||||||||||||
Intersegment eliminations |
(13,798 | ) | (6,814 | ) | (31,050 | ) | (15,671 | ) | ||||||||
Total costs and expenses |
$ | 991,157 | $ | 595,337 | $ | 2,151,130 | $ | 1,257,020 | ||||||||
Depreciation and amortization: |
||||||||||||||||
Pipelines & Terminals |
$ | 13,214 | $ | 11,428 | $ | 25,775 | $ | 22,697 | ||||||||
International Operations |
13,036 | | 23,431 | | ||||||||||||
Natural Gas Storage |
1,803 | 1,640 | 3,519 | 3,281 | ||||||||||||
Energy Services |
1,280 | 1,176 | 2,515 | 2,371 | ||||||||||||
Development & Logistics |
423 | 425 | 757 | 848 | ||||||||||||
Total depreciation and amortization |
$ | 29,756 | $ | 14,669 | $ | 55,997 | $ | 29,197 | ||||||||
Operating income: |
||||||||||||||||
Pipelines & Terminals |
$ | 67,792 | $ | 68,449 | $ | 139,119 | $ | 136,939 | ||||||||
International Operations |
19,972 | | 38,701 | | ||||||||||||
Natural Gas Storage |
(5,618 | ) | 3,302 | (6,018 | ) | 6,753 | ||||||||||
Energy Services |
2,258 | (471 | ) | 3,525 | (3,868 | ) | ||||||||||
Development & Logistics |
1,531 | 659 | 3,171 | 1,606 | ||||||||||||
Total operating income |
$ | 85,935 | $ | 71,939 | $ | 178,498 | $ | 141,430 | ||||||||
Adjusted EBITDA: |
||||||||||||||||
Pipelines & Terminals |
$ | 84,113 | $ | 83,919 | $ | 174,233 | $ | 167,407 | ||||||||
International Operations |
30,646 | | 56,153 | | ||||||||||||
Natural Gas Storage |
(2,612 | ) | 6,174 | (160 | ) | 12,558 | ||||||||||
Energy Services |
3,841 | 1,306 | 6,600 | (246 | ) | |||||||||||
Development & Logistics |
1,643 | 348 | 3,044 | 1,487 | ||||||||||||
Adjusted EBITDA |
$ | 117,631 | $ | 91,747 | $ | 239,870 | $ | 181,206 | ||||||||
Capital additions: (2) |
||||||||||||||||
Pipelines & Terminals |
$ | 19,883 | $ | 14,275 | $ | 34,512 | $ | 21,873 | ||||||||
International Operations |
38,692 | | 60,395 | | ||||||||||||
Natural Gas Storage |
3,339 | 1,809 | 4,821 | 3,292 | ||||||||||||
Energy Services |
514 | 359 | 690 | 2,064 | ||||||||||||
Development & Logistics |
| 166 | 43 | 343 | ||||||||||||
Total capital additions |
$ | 62,428 | $ | 16,609 | $ | 100,461 | $ | 27,572 | ||||||||
Summary of capital additions: (2) |
||||||||||||||||
Maintenance capital expenditures |
$ | 12,293 | $ | 5,925 | $ | 19,766 | $ | 9,195 | ||||||||
Expansion and cost reduction |
50,135 | 10,684 | 80,695 | 18,377 | ||||||||||||
Total capital additions |
$ | 62,428 | $ | 16,609 | $ | 100,461 | $ | 27,572 | ||||||||
(1) | Includes depreciation and amortization. | |
(2) | Amounts exclude accruals for capital expenditures. |
June 30, | December 31, | |||||||
Key Balance Sheet information: | 2011 | 2010 | ||||||
Cash and cash equivalents |
$ | 18,133 | $ | 13,626 | ||||
Long-term debt, total (includes BPL Credit Facility) |
2,189,238 | 1,519,393 | ||||||
BPL Credit Facility |
120,000 | 98,000 |
BPL 2011 Second-Quarter Earnings Results | Page 7 |
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA Continued
(Unaudited)
SELECTED FINANCIAL AND OPERATING DATA Continued
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating data: |
||||||||||||||||
Pipelines & Terminals throughput (b/d - 000s): |
||||||||||||||||
Pipelines: |
||||||||||||||||
Gasoline |
660.8 | 668.9 | 632.0 | 639.1 | ||||||||||||
Jet fuel |
348.1 | 339.3 | 337.3 | 330.9 | ||||||||||||
Diesel fuel |
244.3 | 223.1 | 242.4 | 225.3 | ||||||||||||
Heating oil |
31.3 | 36.1 | 70.7 | 74.8 | ||||||||||||
LPGs |
20.4 | 21.3 | 18.8 | 20.9 | ||||||||||||
Other products |
11.5 | 3.7 | 8.6 | 2.1 | ||||||||||||
Total pipelines throughput |
1,316.4 | 1,292.4 | 1,309.8 | 1,293.1 | ||||||||||||
Terminals throughput (b/d - 000s): |
||||||||||||||||
Products throughput |
625.6 | 570.0 | 581.0 | 563.2 | ||||||||||||
Pipeline Average Tariff (Cents/bbl.) |
77.2 | 73.6 | 75.5 | 72.7 | ||||||||||||
International Operations (b/d - 000s): |
||||||||||||||||
Products throughput |
516.4 | | 521.2 | | ||||||||||||
Energy Services (in millions of gallons): |
||||||||||||||||
Sales volumes |
281.9 | 235.1 | 663.4 | 502.1 | ||||||||||||
BPL 2011 Second-Quarter Earnings Results | Page 8 |
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 | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Adjusted EBITDA: |
||||||||||||||||
Net income attributable to Buckeye Partners, L.P. |
$ | 92,021 | $ | 11,507 | $ | 158,514 | $ | 22,777 | ||||||||
Interest and debt expense |
28,596 | 21,350 | 57,093 | 43,006 | ||||||||||||
Income tax benefit |
(17 | ) | (646 | ) | (193 | ) | (664 | ) | ||||||||
Depreciation and amortization |
29,756 | 14,669 | 55,997 | 29,197 | ||||||||||||
EBITDA |
150,356 | 46,880 | 271,411 | 94,316 | ||||||||||||
Net income attributable to noncontrolling interests
affected by Merger (for periods prior to Merger) (1) |
| 41,921 | | 81,055 | ||||||||||||
Gain on sale of equity investment |
(34,112 | ) | | (34,112 | ) | | ||||||||||
Amortization of unfavorable storage contracts |
(2,396 | ) | | (4,328 | ) | | ||||||||||
Non-cash deferred lease expense |
1,031 | 1,058 | 2,061 | 2,117 | ||||||||||||
Non-cash unit-based compensation expense |
2,752 | 1,888 | 4,838 | 3,718 | ||||||||||||
Adjusted EBITDA |
$ | 117,631 | $ | 91,747 | $ | 239,870 | $ | 181,206 | ||||||||
Distributable cash flow: |
||||||||||||||||
Net income attributable to Buckeye Partners, L.P. |
$ | 92,021 | $ | 11,507 | $ | 158,514 | $ | 22,777 | ||||||||
Depreciation and amortization |
29,756 | 14,669 | 55,997 | 29,197 | ||||||||||||
Net income attributable to noncontrolling interests
affected by Merger (for periods prior to Merger) (1) |
| 41,921 | | 81,055 | ||||||||||||
Gain on sale of equity investment |
(34,112 | ) | | (34,112 | ) | | ||||||||||
Non-cash deferred lease expense |
1,031 | 1,058 | 2,061 | 2,117 | ||||||||||||
Non-cash unit-based compensation expense |
2,752 | 1,888 | 4,838 | 3,718 | ||||||||||||
Amortization of unfavorable storage contracts |
(2,396 | ) | | (4,328 | ) | | ||||||||||
Maintenance capital expenditures |
(12,293 | ) | (5,925 | ) | (19,766 | ) | (9,195 | ) | ||||||||
Distributable cash flow |
$ | 76,759 | $ | 65,118 | $ | 163,204 | $ | 129,669 | ||||||||
Cash Distributions for Coverage Ratio (2) |
$ | 87,235 | $ | 62,897 | $ | 173,385 | $ | 124,780 | ||||||||
Cash Distribution Coverage Ratio |
0.88 | 1.04 | 0.94 | 1.04 | ||||||||||||
(1) | Represents merger between Buckeye Partners, L.P. and Buckeye GP Holdings L.P. in November 2010. | |
(2) | Represents cash distributions declared for limited partner units (LP units) outstanding as of each respective period. 2011 amounts reflect actual cash distributions paid on LP units for the quarter ended March 31, 2011 and estimated cash distributions for the quarter ended June 30, 2011. Distributions with respect to the 6,915,725 Class B units outstanding on the record date for the quarter ending March 31, 2011 and the 7,042,771 Class B units expected to be outstanding for the quarter ending June 30, 2011 are paid in additional Class B units rather than in cash. |