Buckeye Partners, L.P. Reports Improved Third-Quarter Results; Increases Quarterly Cash Distribution

HOUSTON, TX -- (Marketwire) -- 11/08/10 -- Buckeye Partners, L.P. ("Buckeye") (NYSE: BPL) today reported net income attributable to Buckeye's unitholders for the third quarter of 2010 of $61.2 million, or $0.93 per limited partner ("LP") unit, compared to $57.9 million, or $0.89 per LP unit, for the third quarter of 2009.

Buckeye's Adjusted EBITDA (as defined below) for the third quarter of 2010 increased 7.3 percent to $102.1 million from Adjusted EBITDA of $95.2 million in the third quarter of 2009. Third quarter operating income was $81.6 million, compared to $76.0 million in the prior year period.

Buckeye also announced today that its general partner, Buckeye GP LLC, declared a cash distribution of $0.975 per LP unit for the quarter ended September 30th. The distribution will be payable on November 30, 2010, to unitholders of record on November 15, 2010. This cash distribution is the 26th consecutive increase in the quarterly cash distribution and represents a 5.4 percent increase over the $0.925 per LP unit distribution declared for the third quarter of 2009. Buckeye has paid cash distributions in each quarter since its formation in 1986.

"Our third quarter financial performance demonstrated the strength of our asset portfolio and the soundness of our strategy," said Forrest E. Wylie, Chairman and CEO of Buckeye's general partner. "Organic growth and successful acquisitions enabled our Terminalling & Storage segment again to increase its contribution to Adjusted EBITDA. Our Pipeline Operations segment also contributed to Adjusted EBITDA growth, and experienced year-over-year volume growth for the first time since the second quarter of 2007.

"The increase in our pipeline transportation volumes is a sign of improving economic conditions," Wylie said. "Because of effective execution of our best practices initiatives and strategic acquisitions, we are well positioned to take advantage of a strengthening economy."

Buckeye also continued to pursue opportunities to expand its geographic and product diversification through two strategic acquisitions.

"Our recent agreement to purchase a refined petroleum products terminal in Puerto Rico will add approximately 4.6 million barrels of gasoline, jet fuel, diesel, fuel oil, and crude storage capacity to our system," Wylie said. "As our first acquisition outside the Continental United States, it will provide access to a strong local market and create regional growth opportunities. We also just completed the acquisition of a refined petroleum products terminal strategically located between the Lafayette and Alexandria, Louisiana, markets."

Wylie also provided an update on the proposed merger between Buckeye and Buckeye GP Holdings L.P. (NYSE: BGH) ("BGH"). "We are on track to close the merger transaction in the fourth quarter of this year. Based on the proxies received to date, the proposed merger has the overwhelming support of the Buckeye and BGH unitholders," Wylie said.

"The merger is an important step in our growth. By eliminating the incentive distribution rights Buckeye currently pays to BGH, our cost of capital will be reduced, allowing us to be even more competitive in our pursuit of acquisitions and organic growth projects, which increases the opportunity to accelerate distribution growth. Because the merger is important for the future of Buckeye, we ask that Buckeye and BGH unitholders take the time to vote."

The special meetings of Buckeye and BGH unitholders are each scheduled for next week, November 16.

Buckeye will host a conference call with members of executive management today, November 8 at 11:00 a.m. Eastern Time. To access the live Webcast of the call, go to http://www.visualwebcaster.com/event.asp?id=73468 10 minutes prior to its start. Interested parties may participate in the call by dialing 877-440-9795. A replay will be archived and available at this link until December 8, 2010, and the replay may also be accessed by dialing 800-408-3053 and entering passcode 3238685.

Buckeye (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 also owns 68 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 is owned by 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 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 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 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 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, and (ii) non-cash unit-based compensation expense. In addition, Buckeye has excluded the $72.5 million of impairment expense related to the approximately 350-mile natural gas liquids pipeline from Wattenberg, Colorado, to Bushton, Kansas, that Buckeye sold in January 2010 (the "Buckeye NGL Pipeline") and the $29.1 million of expense for organizational restructuring from Adjusted EBITDA for the 2009 periods in order to evaluate our results of operations on a comparative basis over multiple periods. The schedules to this press release include net income allocated to Buckeye's limited partners (before special charges), which is a non-GAAP measure derived by excluding from net income allocated to Buckeye's limited partners items recognizing the Buckeye NGL Pipeline impairment expense and expenses related to an organizational restructuring, and operating income before special charges, which is a non-GAAP measure derived by excluding from operating income items recognizing the Buckeye NGL Pipeline impairment expense and expenses related to an organizational restructuring. EBITDA, Adjusted EBITDA, net income allocated to Buckeye's limited partners (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 directly 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 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. 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. Buckeye's management believes net income allocated to Buckeye's limited partners (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. Distributable cash flow is defined by Buckeye as net income attributable to Buckeye's unitholders, plus depreciation and amortization expense, deferred lease expense for Buckeye's Natural Gas Storage segment, unit-based compensation expense and the senior administrative charge (all of which are non-cash expense items) and minus maintenance capital expenditures. Buckeye's 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 Buckeye's cash available for distribution to its unitholders.

Buckeye believes that investors benefit from having access to the same financial measures used by Buckeye's management. Further, Buckeye believes that these measures are useful to investors because they are one of the bases for comparing Buckeye's operating performance with that of other companies with similar operations, although Buckeye's measures may not be directly comparable to similar measures used by other companies. Please see the attached reconciliations of each of EBITDA, Adjusted EBITDA, net income allocated to Buckeye's limited partners (before special charges), operating income before special charges and distributable cash flow to net income attributable to Buckeye's unitholders.

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 (1) changes in 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, 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 or national economic conditions or adverse capital market conditions, (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, (9) our ability to realize efficiencies expected to result from our previously announced reorganization, and (10) 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 for the year ended December 31, 2009 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.

Buckeye and BGH have filed a joint proxy statement/prospectus and other documents with the SEC in relation to their proposed merger. Investors are urged to read these documents carefully because they contain important information regarding Buckeye, BGH, and the transaction. A definitive joint proxy statement/prospectus and joint proxy statement/prospectus supplement have been sent to unitholders of Buckeye and BGH seeking their approvals as contemplated by the merger agreement in connection with the merger. Investors may obtain a free copy of the joint proxy statement/prospectus, the joint proxy statement/prospectus supplement, and other documents containing information about Buckeye and BGH, without charge, at the SEC's website at www.sec.gov. Copies of the joint proxy statement/prospectus, the joint proxy statement/prospectus supplement, and the SEC filings incorporated by reference in those documents may also be obtained free of charge by contacting Investor Relations at (800) 422-2825, or by accessing www.buckeye.com or www.buckeyegp.com.


                          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,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------
Revenue:
Product sales           $   564,044  $   258,188  $ 1,633,958  $   728,744
Transportation and
 other services             170,813      165,256      499,349      462,760
                        -----------  -----------  -----------  -----------
  Total revenue             734,857      423,444    2,133,307    1,191,504
                        -----------  -----------  -----------  -----------

Costs and expenses:
Cost of product sales
 and natural gas
 storage services           560,248      258,507    1,628,630      702,623
Operating expenses           67,287       65,537      200,556      207,639
Depreciation and
 amortization                16,177       14,253       47,607       43,408
Asset impairment
 expense                          -            -            -       72,540
General and
 administrative               9,549        8,186       30,059       24,625
Reorganization expense            -          996            -       29,109
                        -----------  -----------  -----------  -----------
  Total costs and
   expenses                 653,261      347,479    1,906,852    1,079,944
                        -----------  -----------  -----------  -----------

Operating income             81,596       75,965      226,455      111,560
                        -----------  -----------  -----------  -----------

Other income (expense):
Earnings from equity
 investments                  3,391        3,807        8,807        9,031
Interest and debt
 expense                    (22,014)     (20,543)     (64,825)     (53,780)
Other income                    140          364          379          631
                        -----------  -----------  -----------  -----------
  Total other expense       (18,483)     (16,372)     (55,639)     (44,118)
                        -----------  -----------  -----------  -----------

Net income                   63,113       59,593      170,816       67,442
  Less: Net income
   attributable
   to noncontrolling
   interests                 (1,950)      (1,704)      (5,533)      (4,164)
                        -----------  -----------  -----------  -----------
Net income attributable
 to Buckeye Partners,
 L.P.                   $    61,163  $    57,889  $   165,283  $    63,278
                        ===========  ===========  ===========  ===========

Allocation of net
 income attributable
 to Buckeye Partners,
 L.P.:
  Net income allocated
   to general partner   $    13,113  $    12,242  $    38,405  $    35,363
                        ===========  ===========  ===========  ===========
  Net income allocated
   to limited partners  $    48,050  $    45,647  $   126,878  $    27,915
                        ===========  ===========  ===========  ===========

Earnings per Limited
 Partner Unit:
  Basic                 $      0.93  $      0.89  $      2.45  $      0.55
                        ===========  ===========  ===========  ===========
  Diluted               $      0.93  $      0.89  $      2.45  $      0.55
                        ===========  ===========  ===========  ===========

Weighted average number
 of limited partner
 units outstanding:
  Basic                      51,541       51,374       51,508       50,351
                        ===========  ===========  ===========  ===========
  Diluted                    51,541       51,538       51,508       50,516
                        ===========  ===========  ===========  ===========




                          BUCKEYE PARTNERS, L.P.
                  SELECTED FINANCIAL AND OPERATING DATA
                              (In thousands)
                                (Unaudited)

                           Three Months Ended         Nine Months Ended
                              September 30,             September 30,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------
Revenue:
  Pipeline Operations   $   103,621  $    96,714  $   299,497  $   294,084
  Terminalling &
   Storage                   41,900       34,036      125,039       94,108
  Natural Gas Storage        21,663       28,576       68,318       60,325
  Energy Services           566,804      258,407    1,636,955      728,563
  Development &
   Logistics                  9,082        7,516       27,382       25,446
  Intersegment
   eliminations              (8,213)      (1,805)     (23,884)     (11,022)
                        -----------  -----------  -----------  -----------
    Total revenue       $   734,857  $   423,444  $ 2,133,307  $ 1,191,504
                        ===========  ===========  ===========  ===========

Operating income:
  Pipeline Operations   $    49,947  $    42,466  $   141,312  $    37,349
  Terminalling &
   Storage                   24,055       17,539       71,753       39,573
  Natural Gas Storage         2,914        7,659        9,891       19,691
  Energy Services             2,960        5,703         (274)      10,635
  Development &
   Logistics                  1,720        2,598        3,773        4,312
                        -----------  -----------  -----------  -----------
    Total operating
     income             $    81,596  $    75,965  $   226,455  $   111,560
                        ===========  ===========  ===========  ===========

Total costs and
 expenses: (1)
  Pipeline Operations   $    53,675  $    54,248  $   158,186  $   256,735
  Terminalling &
   Storage                   17,845       16,497       53,286       54,535
  Natural Gas Storage        18,749       20,917       58,427       40,634
  Energy Services           563,843      252,704    1,637,228      717,928
  Development &
   Logistics                  7,362        4,918       23,609       21,134
  Intersegment
   eliminations              (8,213)      (1,805)     (23,884)     (11,022)
                        -----------  -----------  -----------  -----------
    Total costs and
     expenses           $   653,261  $   347,479  $ 1,906,852  $ 1,079,944
                        ===========  ===========  ===========  ===========

Depreciation and
 amortization:
  Pipeline Operations   $     9,950  $     9,394  $    29,361  $    28,695
  Terminalling &
   Storage                    2,562        1,967        7,584        5,852
  Natural Gas Storage         1,764        1,346        5,296        4,272
  Energy Services             1,430        1,070        3,982        3,192
  Development &
   Logistics                    471          476        1,384        1,397
                        -----------  -----------  -----------  -----------
    Total depreciation
     and amortization   $    16,177  $    14,253  $    47,607  $    43,408
                        ===========  ===========  ===========  ===========

Adjusted EBITDA:
  Pipeline Operations   $    62,810  $    55,761  $   178,241  $   169,820
  Terminalling & Storage     26,835       19,807       79,974       48,186
  Natural Gas Storage         5,835       10,265       18,584       27,806
  Energy Services             4,635        7,054        4,440       15,118
  Development &
   Logistics                  2,007        2,293        3,490        5,548
                        -----------  -----------  -----------  -----------
    Adjusted EBITDA     $   102,122  $    95,180  $   284,729  $   266,478
                        ===========  ===========  ===========  ===========

Capital additions, net:
 (2)
  Pipeline Operations   $     7,761  $     8,252  $    22,013  $    20,813
  Terminalling &
   Storage                    8,495        3,165       16,116       15,186
  Natural Gas Storage         4,174        5,978        7,466       18,884
  Energy Services               771        1,171        2,835        2,973
  Development &
   Logistics                    502          418          845          947
                        -----------  -----------  -----------  -----------
    Total capital
     additions, net     $    21,703  $    18,984  $    49,275  $    58,803
                        ===========  ===========  ===========  ===========

Summary of capital
 additions, net:  (2)
  Maintenance capital
   expenditures         $     9,318  $     4,096  $    18,513  $    11,869
  Expansion and cost
   reduction                 12,385       14,888       30,762       46,934
                        -----------  -----------  -----------  -----------
    Total capital
     additions, net     $    21,703  $    18,984  $    49,275  $    58,803
                        ===========  ===========  ===========  ===========


(1) Includes depreciation and amortization.  2009 periods include asset
    impairment expense and reorganization expense.
(2) Amounts exclude accruals for capital expenditures.

Key Balance Sheet                                September 30, December 31,
 information:                                         2010         2009
                                                  -----------  -----------
  Cash and cash
   equivalents                                    $    13,302  $    34,599
  Long-term debt                                    1,441,287    1,498,970




                          BUCKEYE PARTNERS, L.P.
            SELECTED FINANCIAL AND OPERATING DATA - Continued
                              (In thousands)
                                (Unaudited)

                           Three Months Ended         Nine Months Ended
                              September 30,             September 30,
                         ------------------------  ------------------------
                            2010         2009         2010         2009
                         -----------  -----------  -----------  -----------

Operating data:
Pipeline Operations
 Throughput (b/d -
 000s):
  Gasoline                     663.9        666.9        647.4        661.7
  Jet fuel                     350.7        350.0        337.5        342.9
  Diesel fuel                  237.0        199.9        229.2        205.0
  Heating oil                   35.0         33.6         61.4         72.0
  LPGs                          16.7         17.7         19.5         17.0
  NGLs                             -          9.6            -         17.1
  Other products                 3.3          5.0          2.6          9.4
                         -----------  -----------  -----------  -----------
    Total Pipeline
     Operations
     Throughput              1,306.6      1,282.7      1,297.6      1,325.1
                         ===========  ===========  ===========  ===========

Pipeline Average Tariff
 (Cents/bbl.)                   75.7         74.2         73.7         72.0

Terminal Throughput
 (b/d - 000s)  (1)             566.2        472.0        564.2        470.8

Product sales (in
 millions of gallons)          278.0        138.5        780.0        455.5

(1) Reported quantities exclude transfer volumes, which are non-revenue
    generating transfers among our various terminals, and include volumes
    from the Albany terminal.  Previously reported 2009 amounts included
    transfer volumes and excluded volumes from the Albany terminal.




                          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,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------

Adjusted EBITDA:
  Net income
   attributable to
   Buckeye Partners,
   L.P.                 $    61,163  $    57,889  $   165,283  $    63,278
  Interest and debt
   expense                   22,014       20,543       64,825       53,780
  Income tax expense
   (benefit)                    230         (391)        (435)        (263)
  Depreciation and
   amortization              16,177       14,253       47,607       43,408
                        -----------  -----------  -----------  -----------
    EBITDA                   99,584       92,294      277,280      160,203
  Non-cash deferred
   lease expense              1,059        1,125        3,176        3,375
  Non-cash unit-based
   compensation expense       1,479          765        4,273        1,251
  Asset impairment
   expense                        -            -            -       72,540
  Reorganization
   expense                        -          996            -       29,109
                        -----------  -----------  -----------  -----------
    Adjusted EBITDA     $   102,122  $    95,180  $   284,729  $   266,478
                        ===========  ===========  ===========  ===========

Distributable Cash
 Flow:
  Net income
   attributable to
   Buckeye Partners,
   L.P.                 $    61,163  $    57,889  $   165,283  $    63,278
  Depreciation and
   amortization              16,177       14,253       47,607       43,408
  Non-cash deferred
   lease expense              1,059        1,125        3,176        3,375
  Non-cash unit-based
   compensation expense       1,479          765        4,273        1,251
  Asset impairment
   expense                        -            -            -       72,540
  Reorganization
   expense                        -          996            -       29,109
  Non-cash senior
   administrative
   charge                         -            -            -          475
  Maintenance capital
   expenditures              (9,318)      (4,096)     (18,513)     (11,869)
                        -----------  -----------  -----------  -----------
  Distributable cash
   flow                 $    70,560  $    70,932  $   201,826  $   201,567
                        ===========  ===========  ===========  ===========

  Distributions for
   Coverage Ratio (1)   $    63,831  $    59,859  $   188,611  $   176,719
                        ===========  ===========  ===========  ===========

  Coverage Ratio               1.11         1.18         1.07         1.14
                        ===========  ===========  ===========  ===========

(1)  Represents cash distributions declared for respective periods.

Net income allocated to
 limited partners
 (before special
 charges):
  Net income as
   reported                          $    59,593               $    67,442
    Add: Asset
     impairment
     expense                                   -                    72,540
    Add:
     Reorganization
     expense                                 996                    29,109
                                     -----------               -----------
  Net income (as
   adjusted)                              60,589                   169,091
  Less: Net income
   attributable to
   noncontrolling
   interests
   (as adjusted)                         (1,711)                   (4,377)
                                     -----------               -----------
  Net income
   attributable to
   Buckeye Partners,
   L.P. (as adjusted)                $    58,878               $   164,714
                                     ===========               ===========
  Net income allocated
   to limited partners
   (as adjusted)                     $    46,631               $   128,870
                                     ===========               ===========
  Earnings per limited
   partner unit-diluted
   (as adjusted):
    Earnings per
     limited partner
     unit-diluted (as
     adjusted):                      $      0.90               $      2.55
                                     ===========               ===========

Operating income before
 special charges:
  Operating income                   $    75,965               $   111,560
  Asset impairment
   expense                                     -                    72,540
  Reorganization
   expense                                   996                    29,109
                                     -----------               -----------
    Operating income
     before special
     charges                         $    76,961               $   213,209
                                     ===========               ===========