Buckeye Partners, L.P. Reports Financial Results for 2013 Fourth Quarter and Full Year

Fri Feb 7, 2014 8:47am EST

* Reuters is not responsible for the content in this press release.

HOUSTON, Feb. 7, 2014 (GLOBE NEWSWIRE) -- Buckeye Partners, L.P. ("Buckeye") (NYSE:BPL) today reported its financial results for the fourth quarter and full year 2013. Buckeye reported income from continuing operations for the fourth quarter of 2013 of $87.5 million compared to income from continuing operations for the fourth quarter of 2012 of $32.5 million, which included an asset impairment charge of $60.0 million relating to ceasing operations on a portion of Buckeye's NORCO pipeline system.   

Income from continuing operations attributable to Buckeye's unitholders was $0.75 per diluted unit for the fourth quarter of 2013 compared to $0.32 per diluted unit for the fourth quarter 2012. The diluted weighted average of units outstanding in the fourth quarter of 2013 was 114.1 million compared to 98.5 million in the fourth quarter of 2012. The increase in units is primarily the result of two unit offerings during 2013, which reduced outstanding borrowings and funded a portion of the Hess terminals acquisition.

Adjusted EBITDA (as defined below) from continuing operations for the fourth quarter of 2013 was $178.6 million compared to $165.4 million for the fourth quarter of 2012. 

"We realized a significant benefit this quarter from growth capital investments across our businesses," said Clark C. Smith, President and Chief Executive Officer. "Recent investments have delivered both incremental cash flow and product diversification, as we have expanded our crude oil rail capabilities, increased our butane blending capacity across new locations, and improved our service offerings around propylene and diluent storage and logistics. Operations were also initiated at the newly refurbished truck rack as part of our ongoing transformation of our Perth Amboy terminal. We enjoyed the first full quarter of contribution from the most recent phase of expansion at our BORCO facility, which added over 1 million barrels of heavy crude oil storage that is fully contracted.  In addition, we saw significant volume improvement compared to prior year, as pipeline volumes and terminal throughout volumes increased by 5.8% and 6.8%, respectively," continued Mr. Smith. "We also are continuing the integration of the recently acquired Hess terminals and realized a meaningful contribution, excluding transaction- and transition-related costs, from these assets for the short period of time we have owned them." 

Distributable cash flow (as defined below) from continuing operations for the fourth quarter of 2013 was $117.8 million compared to $118.1 million for the fourth quarter of 2012. Buckeye also reported distribution coverage of 0.94 times for the fourth quarter of 2013. "The timing of the equity issuance to fund the Hess terminals acquisition adversely impacted coverage for the quarter and the year. Distributions were declared for these units in both the third and fourth quarter yet we only realized cash flow from the Hess terminal assets for 21 days," commented Mr. Smith. "Distributable cash flow for the fourth quarter of 2013 was also impacted by higher maintenance capital expenditures, the result of the timing of our 2013 capital spending and an increase in interest expense, as a result of two long-term debt offerings. Conversely, distributable cash flow for the year ago quarter benefited from lower capital spending primarily the result of cancelled maintenance projects related to the fourth quarter idling of the NORCO line." Maintenance capital expenditures for the fourth quarter of 2013 were $27.3 million compared to $18.5 million for the fourth quarter of 2012 and interest and debt expense, excluding certain non-cash items, for the fourth quarter of 2013 was $33.3 million compared to $29.0 million for the fourth quarter of 2012.     

Full Year Results. For 2013, Buckeye reported income from continuing operations of $351.6 million compared to income from continuing operations for 2012 of $235.9 million, which included the NORCO asset impairment charge.   

Income from continuing operations attributable to Buckeye's unitholders was $3.23 per diluted unit for 2013 compared to $2.37 per diluted unit for 2012. The diluted weighted average of units outstanding for 2013 was 107.7 million compared to 97.6 million for 2012. The increase in units is primarily the result of two unit offerings during 2013.

For 2013, Adjusted EBITDA from continuing operations was $648.8 million compared to $552.4 million for 2012. For 2013, distributable cash flow from continuing operations was $454.2 million compared to $385.8 million for 2012. Buckeye reported distribution coverage of 0.99 times for 2013. Maintenance capital expenditures for 2013 were $71.5 million compared with $54.1 million for 2012.     

"We believe we are well-positioned to generate excellent financial results in 2014," stated Mr. Smith. "We will continue to realize the benefits from the ongoing growth capital investments we make across our asset footprint in 2014 along with the substantial contribution from the Hess terminals acquisition."

Discontinued Operations. Buckeye's Board of Directors approved a plan in December to divest its non-core Natural Gas Storage business. Buckeye expects to complete the disposition of this business and its assets in 2014. In addition, Buckeye recorded an asset impairment charge of $169.0 million relating to discontinuing the Natural Gas Storage business. This business has been classified as discontinued operations in its consolidated financial statements.

Business Segments. Buckeye also announced today changes to its operating structure and related reporting segments to better align its businesses with its long-term growth strategies. "As we focused on integrating the terminals acquired from Hess, we took the opportunity to reassess our existing business unit classifications. We realigned our business units to optimize the growth opportunities by leveraging the efforts, skills and synergies related to our management, commercial, operating and financial reporting activities. We believe this realignment will allow us to maximize growth opportunities in all four of our segments," said Mr. Smith.

The new Global Marine Terminals segment includes our assets that primarily facilitate global flows of crude oil, refined petroleum products and other commodities, offering our customers connectivity to some of the world's most important bulk storage and blending hubs.  This segment features the flexibility of large-volume, multi-product segregated tankage and offers heating, blending and marine services while enabling synergies among the different facilities. These terminals establish for Buckeye a platform for new growth opportunities in the global marine markets. This segment includes key hubs in the Caribbean at our BORCO facility, Yabucoa terminal and the St. Lucia terminal acquired from Hess, as well as in the New York Harbor at the legacy Perth Amboy terminal and the Port Reading and Raritan Bay terminals acquired from Hess. Khalid A. Muslih, formerly President of the International Operations business unit, will serve as President of the new Global Marine Terminals business unit.

Buckeye's Merchant Services segment centralizes all existing and new merchant activities to leverage common mid- and back-office support. This segment includes the legacy Energy Services segment, the Caribbean fuel oil supply and distribution business and new merchant activities supporting the terminals recently acquired from Hess. Jeremiah J. Ashcroft III continues as President of the Buckeye Services business unit, which includes the new Merchant Services segment as well as the Development & Logistics segment, which is unchanged.

Buckeye's Pipelines & Terminals segment is comprised of the legacy domestic terminals combined with the domestic terminals acquired from Hess in Upstate New York, the Middle Atlantic, the Southeast, including Florida, and the New York Harbor, excluding the Port Reading and Raritan Bay terminals. The Domestic Pipelines & Terminals business unit, which is Buckeye's largest, remains under the leadership of Robert A. Malecky.

Cash Distribution. Buckeye also announced today that its general partner declared a cash distribution of $1.0875 per limited partner unit ("LP Unit") for the quarter ended December 31, 2013. The distribution will be payable on February 25, 2014, to unitholders of record on February 18, 2014. This cash distribution represents a 4.8 percent increase over the $1.0375 per LP Unit distribution declared for the fourth quarter of 2012. For 2013, Buckeye declared distributions of $4.275 LP Unit, which represents a 3.0 percent increase over the $4.15 per LP Unit for 2012. Buckeye has paid cash distributions in each quarter since its formation in 1986. 

Conference Call. Buckeye will host a conference call with members of executive management today, February 7, 2014, at 11:00 a.m. Eastern Time. To access the live webcast of the call, go to http://www.media-server.com/m/p/nuibd4gv ten minutes prior to its start. Interested parties may participate in the call by dialing 877-870-9226.  A replay will be archived and available at this link through March 31, 2014, and the replay also may be accessed by dialing 800-585-8367 and entering conference ID 36221419. 

About Buckeye Partners, L.P.

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 approximately 6,000 miles of pipeline.  Buckeye also owns more than 120 liquid petroleum products terminals with aggregate storage capacity of over 110 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 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, (x) our failure to realize the expected benefits of the acquisition of the liquid petroleum products terminals from Hess, (xi) our ability to successfully complete our organic growth projects and to realize the anticipated financial benefits, and (xii) an unfavorable outcome with respect to the proceedings pending before the Federal Energy Regulatory Commission ("FERC") regarding Buckeye Pipe Line Company, L.P.'s transportation of jet fuel to the New York City airports. 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, 2012 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013, and September 30, 2013, 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)
(Unaudited)
         
  Three Months Ended
December 31,
Year Ended
December 31,
  2013  2012  2013  2012 
Revenue:        
Product sales  $ 1,357,353 $  869,602 $ 3,966,247 $ 3,332,301
Transportation, storage and other services  298,231  255,161  1,087,854  953,602
 Total revenue  1,655,584  1,124,763  5,054,101  4,285,903
         
Costs and expenses:        
Cost of product sales  1,353,996   856,061  3,944,448   3,304,326
Operating expenses  120,647   91,858  413,577   372,993
Depreciation and amortization  37,499   40,039  147,591   138,857
General and administrative  19,625   17,647  70,444   65,241
Asset impairment expense  --   59,950  --   59,950
 Total costs and expenses  1,531,767  1,065,555  4,576,060  3,941,367
         
Operating income  123,817  59,208  478,041  344,536
         
Other income (expense):        
Earnings from equity investments  272   1,813   5,243   6,100 
Interest and debt expense (36,093) (29,821) (130,920) (114,980)
Other income (expense)  8  (509)  295  (452)
 Total other expense, net (35,813) (28,517) (125,382) (109,332)
         
Income from continuing operations before taxes  88,004   30,691   352,659   235,204 
Income tax benefit (expense) (539)  1,852  (1,060)  675 
Income from continuing operations  87,465   32,543   351,599   235,879 
Income (loss) from discontinued operations (including a $169 million asset impairment)  (169,160)  3,256  (187,174) (5,328)
Net income (loss) (81,695)  35,799   164,425   230,551 
Less: Net income attributable to noncontrolling interests (1,057) (836) (4,152) (4,134)
Net income (loss) attributable to Buckeye Partners, L.P.  $ (82,752)  $ 34,963 $ 160,273 $ 226,417
         
 Basic earnings (loss) per unit attributable to Buckeye Partners, L.P.:        
 Continuing operations  $ 0.76  $ 0.33 $ 3.25  $ 2.38
 Discontinued operations (1.49)  0.03 (1.75) (0.05)
 Total $ (0.73) $ 0.36 $ 1.50 $ 2.33
         
 Diluted earnings (loss) per unit attributable to Buckeye Partners, L.P.:        
 Continuing operations $ 0.75  $ 0.32  $ 3.23  $ 2.37
 Discontinued operations (1.48)  0.03  (1.74) (0.05)
 Total $ (0.73) $ 0.35 $ 1.49 $ 2.32
         
Weighted average units outstanding:        
 Basic  113,535  98,180  107,202  97,309
 Diluted  114,091  98,514  107,677  97,635
 
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
(In thousands)
(Unaudited)
         
         
  Three Months Ended
December 31,
Year Ended
December 31,
  2013  2012  2013  2012 
Revenue:         
 Pipelines & Terminals  $ 217,887 $ 185,472  $ 786,759 $ 709,341
 Global Marine Terminals   65,854  61,851   252,270  218,180
 Merchant Services   1,362,857  870,119   3,990,575  3,339,241
 Development & Logistics   17,199  12,796   59,247  50,211
 Intersegment  (8,213) (5,475) (34,750) (31,070)
 Total revenue  $ 1,655,584 $ 1,124,763 $ 5,054,101 $ 4,285,903
         
Total costs and expenses: (1)         
 Pipelines & Terminals  $ 113,566 $ 154,608 $ 401,329 $ 441,531
 Global Marine Terminals   48,714  42,096  176,890  146,051
 Merchant Services   1,364,089  863,994  3,987,490  3,346,721
 Development & Logistics   13,611  10,332  45,101  38,134
 Intersegment  (8,213) (5,475) (34,750) (31,070)
 Total costs and expenses   $ 1,531,767 $ 1,065,555 $ 4,576,060 $ 3,941,367
         
Depreciation and amortization:         
 Pipelines & Terminals  $ 16,717 $ 19,398 $ 63,799 $ 66,457
 Global Marine Terminals   18,828  18,730  76,146  64,912
 Merchant Services   1,461  1,417  5,693  5,521
 Development & Logistics   493  494  1,953  1,967
 Total depreciation and amortization  $ 37,499 $ 40,039 $ 147,591 $ 138,857
         
Operating income (loss):         
 Pipelines & Terminals  $ 104,321 $ 30,864 $ 385,430 $ 267,810
 Global Marine Terminals   17,140  19,755  75,380  72,129
 Merchant Services  (1,232)  6,125  3,085 (7,480)
 Development & Logistics   3,588  2,464  14,146  12,077
 Total operating income  $ 123,817 $ 59,208 $ 478,041 $ 344,536
         
Adjusted EBITDA from continuing operations:         
 Pipelines & Terminals  $ 132,195 $ 116,724 $ 471,091 $ 409,541
 Global Marine Terminals   40,494  36,890  149,740  128,581
 Merchant Services   1,772  8,801  12,616  1,144
 Development & Logistics   4,120  3,003  15,367  13,174
 Adjusted EBITDA from continuing operations  $ 178,581 $ 165,418 $ 648,814 $ 552,440
         
Capital additions, net: (2)         
 Pipelines & Terminals  $ 37,313 $ 51,497 $ 151,827 $ 158,547
 Global Marine Terminals   65,685  45,005  206,472  167,208
 Merchant Services   --  983  113  2,490
 Development & Logistics   1,398  443  2,840  724
 Total segment capital additions, net   104,396  97,928  361,252  328,969
 Natural Gas Storage disposal group (3)   41  405  193  2,369
 Total capital additions, net  $ 104,437 $ 98,333 $ 361,445 $ 331,338
         
Summary of capital additions, net: (2) (3)         
 Maintenance capital expenditures  $ 27,291 $ 18,661 $ 71,595 $ 54,425
 Expansion and cost reduction   77,146  79,672  289,850  276,913
 Total capital additions, net   $ 104,437 $ 98,333 $ 361,445 $ 331,338
         
      December 31,
Key Balance Sheet Information:      2013 2012
 Cash and cash equivalent      $ 4,950 $ 6,776
 Long-term debt, total (4)       3,092,711  2,735,244
_________________         
 (1) Includes depreciation and amortization and asset impairment expense.
 (2) Amounts exclude accruals for capital expenditures.
 (3) Includes Natural Gas Storage disposal group capital expenditures as follows: (i) maintenance capital expenditures of $41 thousand and $119 thousand for the quarter and year ended December 31, 2013, respectively, and $203 thousand and $355 thousand for the quarter and year ended December 31, 2012, respectively, and (ii) expansion and cost reduction capital of $74 thousand for the year ended December 31, 2013, and $202 thousand and $2 million for the quarter and year ended December 31, 2012, respectively.
 (4) Includes long-term debt portion of Buckeye Partners, L.P. Credit Facility of $29 million and $665 million as of December 31, 2013 and 2012, respectively.
 
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA - Continued
(Unaudited)
         
  Three Months Ended
December 31,
Year Ended
December 31,
  2013  2012  2013  2012 
Pipeline & Terminals (average bpd in thousands):        
 Pipelines:         
 Gasoline   710.7  690.4  717.8  701.9
 Jet fuel   335.1  328.5  334.4  339.2
 Middle distillates (1)   390.7  342.9  345.7  318.6
 Other products (2)   26.1  20.7  28.5  25.9
 Total pipelines throughput   1,462.6  1,382.5  1,426.4  1,385.6
         
 Terminals:         
 Products throughput   1,003.9  940.1  975.1  916.7
         
Pipeline Average Tariff (cents/bbl)   83.6  80.3  82.2  81.5
         
Merchant Services (in millions of gallons) (3)         
 Sales volumes   461.7  289.2  1,371.5  1,125.9
         
_________________        
(1)  Includes diesel fuel and heating oil.
(2)  Includes liquefied petroleum gas, intermediate petroleum products and crude oil.
(3)  Includes volumes related to fuel oil supply and distribution services which began in late 2012.
 
 
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
December 31,
Year Ended
December 31,
  2013  2012  2013  2012 
         
Income from continuing operations  $ 87,465 $ 32,543 $ 351,599 $ 235,879
Less: Net income attributable to noncontrolling interests  (1,057) (836) (4,152) (4,134)
Income from continuing operations attributable to Buckeye Partners, L.P.  86,408  31,707  347,447  231,745
Add:  Interest and debt expense   36,093  29,821  130,920  114,980
Income tax expense (benefit)   539 (1,852)  1,060 (675)
Depreciation and amortization   37,499  40,039  147,591  138,857
Non-cash unit-based compensation expense   9,004  8,502  21,013  18,577
Asset impairment expense   --  59,950  --  59,950
Hess acquisition and transition expense   11,806  --  11,806  --
Less: Amortization of unfavorable storage contracts (1) (2,768) (2,749) (11,023) (10,994)
Adjusted EBITDA from continuing operations   $ 178,581 $ 165,418 $ 648,814 $ 552,440
Less: Interest and debt expense, excluding amortization of deferred financing costs, debt discounts and other  (33,317) (28,959) (122,471) (111,511)
 Income tax (expense) benefit, excluding non-cash taxes  (196)  82 (717) (1,095)
 Maintenance capital expenditures  (27,250) (18,458) (71,476) (54,070)
Distributable cash flow from continuing operations   $ 117,818 $ 118,083  $ 454,150 $ 385,764
         
Distributions for coverage ratio (2)  $ 125,475 $ 94,033  $ 456,507 $ 376,193
Coverage ratio from continuing operations   0.94  1.26  0.99  1.03
_____________________         
(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 LP Units outstanding as of each respective period. Amounts for 2013 reflect actual cash distributions paid on LP Units for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 and estimated cash distribution for the quarter ended December 31, 2013. As of September 1, 2013, the 8,469,233 Class B Units outstanding, which represented all Class B Units, converted into LP Units on a one-for-one basis. Prior to conversion, distributions with respect to the Class B Units outstanding on the record date were paid in additional Class B Units rather than in cash. 
 
BUCKEYE PARTNERS, L.P.
SELECTED FINANCIAL AND OPERATING DATA
Non-GAAP Reconciliations – Continued
(In thousands)
(Unaudited)
           
  First Quarter Second Quarter Third Quarter Fourth Quarter Total
           
2013            
Adjusted EBITDA from continuing operations (restated): (1)          
 Pipelines & Terminals   $ 115,385 $ 107,635 $ 115,876 $ 132,195 $ 471,091
 Global Marine Terminals   35,479  37,803  35,964  40,494  149,740
 Merchant Services   6,194  4,724 (74)  1,772  12,616
 Development & Logistics   3,173  3,667  4,407  4,120  15,367
 Adjusted EBITDA from continuing operations (restated)  $ 160,231 $ 153,829 $ 156,173 $ 178,581 $ 648,814
           
Adjusted EBITDA (as previously reported):           
 Pipelines & Terminals  $ 115,544 $ 109,085 $ 114,412 $ 132,195 $ 471,236
 International Operations   35,243  37,203  40,475  40,494  153,415
 Natural Gas Storage  (1,827) (5,757) (2,759)  -- (10,343)
 Energy Services   7,191  4,773 (2,220)  1,772  11,516
 Development & Logistics   2,698  3,187  3,934  4,120  13,939
 Adjusted EBITDA (as previously reported)  $ 158,849 $ 148,491 $ 153,842 $ 178,581 $ 639,763
           
           
           
2012            
 Adjusted EBITDA from continuing operations (restated): (1)          
 Pipelines & Terminals  $ 89,611 $ 91,022 $ 112,184 $ 116,724 $ 409,541
 Global Marine Terminals   29,493  28,533  33,665  36,890  128,581
 Merchant Services  (6,091) (3,195)  1,629  8,801  1,144
 Development & Logistics   2,930  3,722  3,519  3,003  13,174
 Adjusted EBITDA from continuing operations (restated)  $ 115,943 $ 120,082 $ 150,997  $ 165,418 $ 552,440
           
Adjusted EBITDA (as previously reported):           
 Pipelines & Terminals  $ 88,232 $ 89,598 $ 112,879 $ 118,346 $ 409,055
 International Operations   31,666  30,591  33,548  36,299  132,104
 Natural Gas Storage  (1,268) (388)  1,357  6,417  6,118
 Energy Services  (6,172) (3,206)  1,619  8,283  524
 Development & Logistics   2,529  3,337  3,168  2,688  11,722
 Adjusted EBITDA (as previously reported)  $ 114,987 $ 119,932 $ 152,571 $ 172,033 $ 559,523
           
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 (1) Historical segment amounts previously reported have been restated to conform to our new reporting structure. Additional changes in previously reported amounts are due to the following items: 
 -- In December 2013, the Board of Directors of Buckeye GP approved a plan to divest our Natural Gas Storage segment and its related assets as we no longer believe this business is aligned with our long-term business strategy. Therefore, assets and liabilities related to the former Natural Gas Storage segment were classified as "Assets held for sale" and "Liabilities held for sale", respectively, as of December 31, 2013 and we have reported the results of operations as discontinued operations for all periods presented. 
 -- Reclassifications of operating and general and administrative expenses among our segments. The reclassification impacted Adjusted EBITDA by segment, however, had no impact on total Adjusted EBITDA.
CONTACT: Kevin J. Goodwin
         Senior Director, Investor Relations
         Irelations@buckeye.com
         (800) 422-2825