Buckeye Partners, L.P. Reports 2012 Third Quarter Earnings Results and Declares Cash Distribution

HOUSTON, Nov. 2, 2012 (GLOBE NEWSWIRE) -- Buckeye Partners, L.P. ("Buckeye") (NYSE:BPL) today reported net income attributable to Buckeye's unitholders for the third quarter of 2012 of $85.1 million, or $0.87 per diluted unit, compared to a net loss attributable to Buckeye's unitholders for the third quarter of 2011 of $109.7 million, or a $1.18 loss per diluted unit. Buckeye's Adjusted EBITDA (as defined below) for the third quarter of 2012 was $152.6 million compared with Adjusted EBITDA of $126.5 million for the third quarter of 2011. Operating income for the third quarter of 2012 was $113.4 million compared to an operating loss of $77.3 million for the third quarter of 2011. Net income attributable to Buckeye's unitholders and operating income for the third quarter of 2011 were negatively impacted by a non-cash charge for the impairment of $169.6 million of goodwill associated with the acquisition of Lodi Gas Storage, L.L.C. Excluding the goodwill impairment charge, net income attributable to Buckeye's unitholders for the third quarter of 2011 would have been $59.9 million, or $0.64 per diluted unit, and operating income for the third quarter of 2011 would have been $92.3 million.

"Improving business conditions and the continued execution of our growth strategy contributed to very strong results for the third quarter of 2012," stated Clark C. Smith, President and Chief Executive Officer. "We benefited from higher volumes and rates for our domestic pipelines and terminals and increased cash flows from our international segment as a result of the 1.1 million barrel expansion at BORCO that became operational July 1st. Additionally, our Perth Amboy marine terminal in the New York Harbor, acquired in late July, contributed positively to third quarter results."

Buckeye also announced today that its general partner declared a cash distribution of $1.0375 per limited partner ("LP") unit for the quarter ended September 30, 2012. Class B unitholders will not receive a distribution of cash, but instead will be issued additional Class B units pursuant to Buckeye's partnership agreement. The distribution will be payable on November 30, 2012, to unitholders of record on November 12, 2012. This cash distribution represents a 1.2% increase over the $1.025 per LP unit distribution declared for the third quarter of 2011. 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, November 2, 2012, at 11:00 a.m. Eastern Time. To access the live webcast of the call, go to http://investor.shareholder.com/media/eventdetail.cfm?eventid=120181&CompanyID=AMDA-QJUY2&e=1&mediaKey=D17492E652916DA0EAD3A8A9634A6324 10 minutes prior to its start. Interested parties may participate in the call by dialing 877-870-9226 and referencing conference ID 46981626. A replay will be archived and available at this link through December 3, 2012, and the replay also may be accessed by dialing 800-585-8367 and entering conference ID 46981626

Buckeye Partners, L.P. (NYSE:BPL) is a publicly traded master limited 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 approximately 100 liquid petroleum products terminals with aggregate storage capacity of approximately 70 million barrels. In addition, Buckeye operates and/or maintains third-party pipelines 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. Buckeye's flagship marine terminal in The Bahamas, BORCO, is one of the largest crude oil and petroleum products storage facilities in the world, serving the international markets as a premier global logistics hub. More information concerning Buckeye can be found at www.buckeye.com.

Adjusted EBITDA and distributable cash flow are measures not defined by GAAP. Adjusted EBITDA is the primary measure used by our senior management, including our Chief Executive Officer, to (i) evaluate our consolidated operating performance and the operating performance of our business segments, (ii) allocate resources and capital to business segments, (iii) evaluate the viability of proposed projects, and (iv) determine overall rates of return on alternative investment opportunities. Distributable cash flow is another measure used by our senior management to provide a clearer picture of Buckeye's cash available for distribution to its unitholders. Adjusted EBITDA and distributable cash flow eliminate (i) non-cash expenses, including, but not limited to, depreciation and amortization expense resulting from the significant capital investments we make in our businesses and from intangible assets recognized in business combinations, (ii) charges for obligations expected to be settled with the issuance of equity instruments, and (iii) items that are not indicative of our core operating performance results and business outlook.

Buckeye believes that investors benefit from having access to the same financial measures used by senior management and that these measures are useful to investors because they aid in comparing Buckeye's operating performance with that of other companies with similar operations. The Adjusted EBITDA and distributable cash flow data presented by Buckeye may not be comparable to similarly titled measures at other companies because these items may be defined differently by other companies. Please see the attached reconciliations of each of Adjusted EBITDA and distributable cash flow to net income.

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. 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 (i) changes in federal, state, local, and foreign laws or regulations to which we are subject, including those governing pipeline tariff rates and those that permit the treatment of us as a partnership for federal income tax purposes, (ii) terrorism, adverse weather conditions, including hurricanes, environmental releases, and natural disasters, (iii) changes in the marketplace for our products or services, such as increased competition, better energy efficiency, or general reductions in demand, (iv) adverse regional, national, or international economic conditions, adverse capital market conditions, and adverse political developments, (v) shutdowns or interruptions at our pipeline, terminal, and storage assets or at the source points for the products we transport, store, or sell, (vi) unanticipated capital expenditures in connection with the construction, repair, or replacement of our assets, (vii) volatility in the price of refined petroleum products and the value of natural gas storage services, (viii) nonpayment or nonperformance by our customers, (ix) our ability to integrate acquired assets with our existing assets and to realize anticipated cost savings and other efficiencies and benefits, and (x) an unfavorable outcome with respect to the proceedings pending before the Federal Energy Regulatory Commission ("FERC") regarding Buckeye Pipe Line Company, L.P.'s tariff rates. You should read our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2011 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 today's date.

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of Buckeye's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, Buckeye's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

BUCKEYE PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Revenue:
Product sales $688,948 $884,436 $2,462,699 $2,775,698
Transportation and other services 277,022 232,475 745,350 670,841
Total revenue 965,970 1,116,911 3,208,049 3,446,539
Costs and expenses:
Cost of product sales and natural gas storage services 698,019 881,596 2,476,659 2,773,899
Operating expenses 101,242 96,776 300,263 266,909
Depreciation and amortization 37,134 31,230 104,486 87,227
General and administrative 16,222 15,054 51,074 47,751
Goodwill impairment expense -- 169,560 -- 169,560
Total costs and expenses 852,617 1,194,216 2,932,482 3,345,346
Operating income (loss) 113,353 (77,305) 275,567 101,193
Other income (expense):
Earnings from equity investments 553 2,379 4,287 7,760
Gain on sale of equity investment -- -- -- 34,112
Interest and debt expense (28,737) (33,199) (85,159) (90,292)
Other income (expense) 90 (75) 57 432
Total other expense, net (28,094) (30,895) (80,815) (47,988)
Net income (loss) 85,259 (108,200) 194,752 53,205
Less: Net income attributable to noncontrolling interests (143) (1,500) (3,298) (4,391)
Net income (loss) attributable to Buckeye Partners, L.P. $85,116 $(109,700) $191,454 $48,814
Earnings (loss) per unit:
Basic $0.87 $(1.18) $1.97 $0.55
Diluted $0.87 $(1.18) $1.97 $0.54
Weighted average units outstanding:
Basic 97,993 92,982 97,017 89,499
Diluted 98,342 92,982 97,340 89,831

BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Revenue:
Pipelines & Terminals $194,609 $162,740 $527,849 $456,056
International Operations 51,686 47,986 152,349 146,051
Natural Gas Storage 20,229 15,742 46,909 49,431
Energy Services 691,875 894,618 2,469,122 2,810,055
Development & Logistics 11,798 10,766 37,415 30,937
Intersegment (4,227) (14,941) (25,595) (45,991)
Total revenue $965,970 $1,116,911 $3,208,049 $3,446,539
Total costs and expenses: (1)
Pipelines & Terminals $103,158 $93,482 $297,043 $247,679
International Operations 30,615 30,329 92,660 89,693
Natural Gas Storage 21,872 187,820 56,367 227,527
Energy Services 692,303 889,203 2,482,856 2,801,115
Development & Logistics 8,896 8,323 29,151 25,323
Intersegment (4,227) (14,941) (25,595) (45,991)
Total costs and expenses $852,617 $1,194,216 $2,932,482 $3,345,346
Depreciation and amortization:
Pipelines & Terminals $18,272 $14,727 $49,368 $40,502
International Operations 14,971 12,868 43,873 36,299
Natural Gas Storage 1,893 1,807 5,668 5,326
Energy Services 1,510 1,379 4,104 3,894
Development & Logistics 488 449 1,473 1,206
Total depreciation and amortization $37,134 $31,230 $104,486 $87,227
Operating income (loss):
Pipelines & Terminals $91,451 $69,258 $230,806 $208,377
International Operations 21,071 17,657 59,689 56,358
Natural Gas Storage (1,643) (172,078) (9,458) (178,096)
Energy Services (428) 5,415 (13,734) 8,940
Development & Logistics 2,902 2,443 8,264 5,614
Total operating income (loss) $113,353 $(77,305) $275,567 $101,193
Adjusted EBITDA:
Pipelines & Terminals $112,879 $86,510 $290,709 $260,743
International Operations 33,548 30,095 95,805 86,248
Natural Gas Storage 1,357 426 (299) 266
Energy Services 1,619 6,978 (7,759) 13,578
Development & Logistics 3,168 2,519 9,034 5,563
Adjusted EBITDA $152,571 $126,528 $387,490 $366,398
Capital additions: (2)
Pipelines & Terminals $34,944 $26,644 $107,050 $61,156
International Operations 48,704 62,442 122,203 122,837
Natural Gas Storage 235 852 1,964 5,673
Energy Services 1,020 538 1,507 1,228
Development & Logistics 102 431 281 474
Total capital additions $85,005 $90,907 $233,005 $191,368
Summary of capital additions: (2)
Maintenance capital expenditures $11,889 $16,803 $35,764 $36,569
Expansion and cost reduction 73,116 74,104 197,241 154,799
Total capital additions $85,005 $90,907 $233,005 $191,368
September 30, December 31,
Key Balance Sheet information: 2012 2011
Cash and cash equivalents $2,951 $12,986
Long-term debt, total (3) 2,672,677 2,393,574
__________________
(1) Includes depreciation and amortization.
(2) Amounts exclude accruals for capital expenditures.
(3) Includes long-term debt portion of Buckeye Partners, L.P. Credit Facility of $602.6 million and $324.0 million as of September 30, 2012 and December 31, 2011, respectively.

BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA - Continued
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Pipelines & Terminals (average bpd in thousands):
Pipelines:
Gasoline 729.7 693.4 705.9 658.3
Jet fuel 352.7 344.8 342.7 339.8
Middle distillates (1) 306.0 298.7 314.6 309.4
Other products (2) 18.8 19.6 23.5 24.7
Total pipelines throughput 1,407.2 1,356.5 1,386.7 1,332.2
Terminals:
Products throughput (3) 910.9 879.1 888.3 681.5
Pipeline Average Tariff (cents/bbl) 84.5 77.3 82.0 76.1
Energy Services (in millions of gallons):
Sales volumes 233.4 297.4 836.7 960.8
_________________
(1) Includes diesel fuel, heating oil and kerosene.
(2) Includes liquefied petroleum gas ("LPG").
(3) Amounts include throughput volumes at terminals acquired from BP Products North America Inc. and its affiliates ("BP") and ExxonMobil Corporation on June 1, 2011 and July 19, 2011, respectively.

BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
Non-GAAP Reconciliations
(In thousands, except per unit amounts and coverage ratio)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Net income (loss) $85,259 $(108,200) $194,752 $53,205
Less: Net income attributable to noncontrolling interests (143) (1,500) (3,298) (4,391)
Net income (loss) attributable to Buckeye Partners, L.P. 85,116 (109,700) 191,454 48,814
Add: Interest and debt expense 28,737 33,199 85,159 90,292
Income tax expense (benefit) 511 -- 1,177 (193)
Depreciation and amortization 37,134 31,230 104,486 87,227
Non-cash deferred lease expense 975 1,030 2,925 3,091
Non-cash unit-based compensation expense 2,846 1,694 10,534 6,532
Goodwill impairment expense -- 169,560 -- 169,560
Less: Amortization of unfavorable storage contracts (1) (2,748) (485) (8,245) (4,813)
Gain on sale of equity investment -- -- -- (34,112)
Adjusted EBITDA $152,571 $126,528 $387,490 $366,398
Less: Interest and debt expense, excluding amortization of deferred financing costs and debt discounts (27,868) (28,709) (82,552) (83,541)
Income tax (expense) benefit (511) -- (1,177) 193
Maintenance capital expenditures (11,889) (16,803) (35,764) (36,569)
Distributable cash flow $112,303 $81,016 $267,997 $246,481
Distributions for Coverage Ratio (2) $94,055 $88,357 $282,160 $261,742
Coverage Ratio 1.19 0.92 0.95 0.94
_____________________
(1) Represents the amortization of the negative fair values allocated to certain unfavorable storage contracts acquired in connection with the BORCO acquisition.
(2) Represents cash distributions declared for limited partner units ("LP units") outstanding as of each respective period. Amounts for 2012 reflect actual cash distributions paid on LP units for the quarters ended March 31, 2012 and June 30, 2012 and estimated cash distributions for the quarter ended September 30, 2012. Distributions with respect to the 7,445,999 and 7,605,510 Class B Units outstanding on the record date for the quarters ending March 31, 2012 and June 30, 2012, respectively, and the 7,777,811 Class B units expected to be outstanding for the quarter ending September 30, 2012 are paid in additional Class B units rather than in cash.

CONTACT: Kevin J. Goodwin Senior Director, Investor Relations Irelations@buckeye.com (800) 422-2825

Source: Buckeye Partners, L.P.

BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
Non-GAAP Reconciliations - Continued
(In thousands, except per unit amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Net income attributable to Buckeye Partners, L.P., as adjusted:
Net income (loss), as reported $85,259 $(108,200) $194,752 $53,205
Add: Goodwill impairment expense -- 169,560 -- 169,560
Net income, as adjusted 85,259 61,360 194,752 222,765
Less: Net income attributable to noncontrolling interests (143) (1,500) (3,298) (4,391)
Net income attributable to Buckeye Partners, L.P., as adjusted $85,116 $59,860 $191,454 $218,374
Earnings per unit-diluted, as adjusted $0.87 $0.64 $1.97 $2.43
Operating income, as adjusted:
Operating income (loss), as reported $113,353 $(77,305) $275,567 $101,193
Add: Goodwill impairment expense -- 169,560 -- 169,560
Operating income, as adjusted $113,353 $92,255 $275,567 $270,753