ACQUISITIONS AND DISPOSITION

Business Combinations

2015 Transactions

Pennsauken pipeline acquisition

In December 2015, we acquired a pipeline and associated tanks and other infrastructure in Pennsauken, New Jersey for $5.3 million. The operations of these assets are reported in our Domestic Pipelines & Terminals segment. The acquisition cost has been allocated on a preliminary basis to assets acquired based on estimated fair values at the acquisition date, with amounts exceeding the fair value recorded as goodwill, which represent expected synergies from combining the acquired assets with our existing operations. Fair values have been developed using recognized business valuation techniques. The estimates of fair value reflected as of December 31, 2015 are subject to change pending final valuation analysis. The purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed as follows (in thousands):



Property, plant and equipment	5,287
Goodwill	2,372
Environmental liabilities	(2,372		)
Allocated purchase price	$	5,287

Unaudited Pro forma Financial Results for the Pennsauken pipeline acquisition

Our consolidated statements of operations do not include earnings from the pipeline and associated tanks and other infrastructure prior to December 10, 2015, the effective acquisition date of these assets. The preparation of unaudited pro forma financial information for the pipeline and associated tanks and other infrastructure is impracticable due to the fact that meaningful historical revenue information is not available. The revenues and earnings impact of this acquisition was not significant to our financial results for the year ended December 31, 2015.

Springfield pipeline and terminal acquisitions

In March and May 2015, we acquired a terminal and pipeline in Springfield, Massachusetts from ExxonMobil Oil Corporation (“ExxonMobil”) for an aggregate $7.7 million. The operations of these assets are reported in our Domestic Pipelines & Terminals segment. The acquisition cost has been allocated on a preliminary basis to assets acquired based on estimated fair values at the acquisition date, with amounts exceeding the fair value recorded as goodwill, which represents both expected synergies from combining the acquired assets with our existing operations and the economic value attributable to optimizing, modernizing and commercializing the asset from this acquisition. Fair values have been developed using recognized business valuation techniques. The estimates of fair value reflected as of December 31, 2015 are subject to change pending final valuation analysis. The purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed as follows (in thousands):



Property, plant and equipment	$	3,951
Goodwill	8,254
Asset retirement obligation	(4,200		)
Environmental liabilities	(293		)
Allocated purchase price	$	7,712

Unaudited Pro forma Financial Results for the Springfield pipeline and terminal acquisition

Our consolidated statements of operations do not include earnings from the pipeline and terminal acquired from ExxonMobil prior to March 31, 2015 and May 5, 2015, the effective acquisition dates of the terminal and pipeline acquired from ExxonMobil, respectively. The preparation of unaudited pro forma financial information for the terminal and pipeline acquired from ExxonMobil is impracticable due to the fact that ExxonMobil historically operated the assets as part of its integrated distribution network and, therefore, meaningful historical revenue information is not available. The revenues and earnings impact of this acquisition was not significant to our financial results for the year ended December 31, 2015.

2014 Transaction

In September 2014, we acquired an 80% interest in Buckeye Texas, a newly-formed entity, for $816.1 million, net of cash acquired of $15.0 million and working capital and capital expenditure adjustments of $4.9 million required by the contribution agreement with Trafigura Corpus Christi Holdings Inc. (the “Buckeye Texas Partners Transaction”). Buckeye Texas and its subsidiaries, which are owned jointly with Trafigura Trading LLC, formerly known as Trafigura AG (“Trafigura”), own and operate a vertically integrated system of midstream assets, which include five vessel berths, including three deep-water docks, two 25,000 barrels per day condensate splitters, approximately 6.0 million barrels of liquid petroleum products storage capacity, including a refrigerated and compressed liquefied petroleum gas (“LPG”) storage complex, along with rail and truck loading/unloading capabilities. The platform also comprises three field gathering facilities with associated storage in the Eagle Ford play and pipeline connectivity that allow Buckeye Texas to move Eagle Ford play crude oil and condensate production directly to the terminalling complex in Corpus Christi. These assets form an integrated system with connectivity from the production in the field to the marine terminal infrastructure and the processing complex in Corpus Christi. At the time of acquisition most of the significant assets mentioned were under construction. Construction of the significant assets and commissioning activities were recently completed in late November 2015. The initial build-out of these facilities was funded through additional partnership contributions by us and Trafigura based on our respective ownership interests. Concurrent with this acquisition, we entered into multi-year storage and throughput commitments with Trafigura that support substantially all the capacity and cash flows expected from these assets. At the time of acquisition, we concluded Buckeye Texas is a VIE of which we are the primary beneficiary. In making this conclusion, we evaluated the activities that significantly impact the economics of the VIE, including our role to perform all services reasonably required to construct, operate and maintain the assets. We consolidated Buckeye Texas due to our conclusion that Buckeye Texas is a VIE of which we are the primary beneficiary. The operations of these assets are reported in the Global Marine Terminals segment.

The acquisition cost has been allocated to assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with amounts exceeding the fair value recorded as goodwill, which represents both expected synergies from combining the Buckeye Texas operations with our existing operations and the economic value attributable to future expansion projects resulting from this acquisition. Fair values have been developed using recognized business valuation techniques. The purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed as follows (in thousands):



Current assets	$	23,061
Property, plant and equipment	527,390
Intangible assets	376,000
Goodwill	167,379
Current liabilities	(54,943		)
Noncontrolling interests	(207,778		)
Allocated purchase price	$	831,109

Unaudited Pro forma Financial Results for the Buckeye Texas Partners Transaction

Our consolidated statements of operations do not include earnings from the assets acquired from Trafigura prior to September 16, 2014, the effective acquisition date of the Buckeye Texas Partners Transaction. The preparation of unaudited pro forma financial information for the Buckeye Texas Partners Transaction is impracticable due to the fact that the construction of significant assets and commissioning activities were recently completed in late November 2015, therefore, meaningful historical revenue information is not available. The revenues and earnings impact of this acquisition was not significant to our financial results for the year ended December 31, 2014, as significant assets were still under construction.

2013 Transaction

In December 2013, we acquired certain wholesale distribution contracts and 20 liquid petroleum products terminals with total storage capacity of approximately 39 million barrels from Hess Corporation (“Hess”) for $856.4 million, net of cash acquired (the “Hess Terminals Acquisition”). The 19 domestic terminals are located primarily in major metropolitan locations along the U.S. East Coast and have approximately 29 million barrels of aggregate liquid petroleum products storage capacity, including approximately 15 million barrels of capacity strategically located in New York Harbor. These terminals have access to products supplied by marine vessels and barges as well as pipelines. Excluding the Port Reading and Raritan Bay terminals, which are reported as part of our Global Marine Terminals segment, the operations of these domestic terminals acquired from Hess are reported in our Domestic Pipelines & Terminals segment. The terminal on St. Lucia in the Caribbean has approximately 10 million barrels of crude oil and refined petroleum products storage capacity with deep-water access, and its operations are reported in our Global Marine Terminals segment. The operations relating to the wholesale distribution contracts are reported in our Merchant Services segment. We allocated $6.0 million of goodwill resulting from the Hess Terminals Acquisition to the Domestic Pipelines & Terminals reporting unit due to expected growth opportunities from one of the domestic terminals with high throughput volumes. The remaining $3.4 million of goodwill was allocated to the Merchant Services reporting unit as it relates to the wholesale distribution contracts, which will enhance our wholesale distribution and rack marketing business. Concurrent with this acquisition, we entered into multi-year storage and throughput commitments with Hess.

The acquisition cost has been allocated to assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with amounts exceeding the fair value recorded as goodwill, which represents both expected synergies from combining our operations from the Hess Terminals Acquisition with our existing operations and the economic value attributable to future expansion projects resulting from this acquisition. Fair values have been developed using recognized business valuation techniques. The purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed as follows (in thousands):



Current assets	$	16,533
Property, plant and equipment	802,101
Intangible assets	30,520
Goodwill	9,375
Current liabilities	(882		)
Environmental liabilities	(1,270		)
Allocated purchase price	$	856,377

Unaudited Pro forma Financial Results for Hess Terminals Acquisition

Our consolidated statements of operations do not include earnings from the terminals acquired from Hess (the “Hess Terminals”) prior to December 11, 2013, the effective date of the Hess Terminals Acquisition. The preparation of unaudited pro forma financial information for the Hess Terminals Acquisition is impracticable due to the fact that Hess historically operated the domestic terminals primarily as part of its integrated distribution network and therefore, meaningful historical revenue information is not available. The following table summarizes revenue and net income related to the assets acquired from Hess included in our consolidated statements of operations for the year ended December 31, 2013 (in thousands):



Revenue	$	8,734
Net income (1)	(7,657		)

____________________________


(1)	Includes transition expenses of $11.8 million.

Acquisition of Remaining Interest in WesPac Pipelines - Memphis LLC

In April 2015, our operating subsidiary, BPH, purchased from Kealine LLC for $10.0 million the remaining 10% ownership interest in Buckeye Aviation (Memphis) LLC, formerly known as WesPac Pipelines - Memphis LLC (“Buckeye Memphis”), which was accounted for as an equity transaction. As a result of the acquisition, we now own 100% of Buckeye Memphis. Previously, in April 2014, BPH had purchased an additional 10% ownership interest in Buckeye Memphis for $9.5 million, increasing our ownership interest in Buckeye Memphis from 80% to 90%, and in April 2013, BPH had purchased an additional 10% ownership interest in Buckeye Memphis for $9.7 million, increasing our ownership interest in Buckeye Memphis from 70% to 80%. The acquisitions were accounted for as equity transactions since BPH retained controlling interest in Buckeye Memphis.

Disposition

In December 2014, we completed the sale of all of the outstanding limited liability company interests in Lodi, our Natural Gas Storage business, to Brookfield Infrastructure and its institutional partners (“Brookfield”) for $102.6 million in cash, net of expenses and working capital adjustments of $2.4 million. Refer to Note 4 and Note 5 for further information.