BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2017

The following table summarizes revenue by each segment for the periods indicated (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenue:
Domestic Pipelines & Terminals	$	254,277		$	265,036		$	761,438		$	752,968
Global Marine Terminals	155,281			170,072			487,613			509,653
Merchant Services	526,844			344,041			1,498,438			1,103,186
Intersegment	(13,783		)	(12,544		)	(45,396		)	(41,486		)
Total revenue	$	922,619		$	766,605		$	2,702,093		$	2,324,321

Summary of revenue for continuing operations by major geographic area

The following table summarizes revenue by major geographic area for the periods indicated (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Revenue:
United States	$	855,795	$	683,850	$	2,474,562	$	2,072,893
International	66,824		82,755		227,531		251,428
Total revenue	$	922,619	$	766,605	$	2,702,093	$	2,324,321

Adjusted EBITDA by segment and Reconciliation of Net Income to Adjusted EBITDA

The following tables present Adjusted EBITDA by segment and on a consolidated basis and a reconciliation of net income, which is the most comparable financial measure under GAAP, to Adjusted EBITDA for the periods indicated (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Adjusted EBITDA:
Domestic Pipelines & Terminals	$	138,880		$	152,785		$	413,710		$	423,245
Global Marine Terminals	128,696			110,705			391,084			325,710
Merchant Services	9,742			8,159			19,224			23,909
Total Adjusted EBITDA	$	277,318		$	271,649		$	824,018		$	772,864

Reconciliation of Net Income to Adjusted EBITDA:
Net income	$	120,224		$	160,270		$	362,912		$	439,746
Less: Net income attributable to noncontrolling interests	(4,037		)	(3,896		)	(10,427		)	(11,803		)
Net income attributable to Buckeye Partners, L.P.	116,187			156,374			352,485			427,943
Add: Interest and debt expense	56,561			48,476			168,870			144,093
Income tax expense	448			308			1,709			896
Depreciation and amortization ⁽¹⁾	65,661			63,472			195,987			188,220
Non-cash unit-based compensation expense	8,176			8,853			25,756			22,912
Acquisition and transition expense ⁽²⁾	1,447			309			3,275			479
Hurricane-related costs ⁽³⁾	1,804			—			4,820			—
Proportionate share of Adjusted EBITDA for the equity method investment in VTTI ⁽⁴⁾	33,430			—			90,848			—
Less: Amortization of unfavorable storage contracts ⁽⁵⁾	—			(443		)	—			(5,979		)
Gains on property damage recoveries ⁽⁶⁾	—			(5,700		)	(4,621		)	(5,700		)
Earnings from the equity method investment in VTTI ⁽⁴⁾	(6,396		)	—			(15,111		)	—
Adjusted EBITDA	$	277,318		$	271,649		$	824,018		$	772,864


(1)	Includes 100% of the depreciation and amortization expense of $18.1 million and $18.5 million for Buckeye Texas for the three months ended September 30, 2017 and 2016, respectively, and $54.1 million and $52.5 million for the nine months ended September 30, 2017 and 2016, respectively.


(2)	Represents transaction, internal and third-party costs related to asset acquisition and integration.

(3)

Represents costs incurred at our BBH facility in the Bahamas, Yabucoa Terminal in Puerto Rico, Corpus Christi facilities in Texas, and certain terminals in Florida, as a result of Hurricanes Harvey, Irma, and Maria, which occurred in August and September 2017, as well as Hurricane Matthew, which occurred in October 2016, consisting of operating expenses and write-offs of damaged long-lived assets.

(4)

Due to the significance of our equity method investment in VTTI, effective January 1, 2017, we applied the definition of Adjusted EBITDA, covered in our description of Adjusted EBITDA, with respect to our proportionate share of VTTI’s Adjusted EBITDA. The calculation of our proportionate share of the reconciling items used to derive Adjusted EBITDA is based upon our 50% equity interest in VTTI, prior to adjustments related to noncontrolling interests in several of its subsidiaries and partnerships, which are immaterial.


(5)	Represents amortization of negative fair value allocated to certain unfavorable storage contracts acquired in connection with the BBH acquisition.


(6)	Represents gains on recoveries of property damages caused by third parties, primarily related to an allision with a ship dock at our terminal located in Pennsauken, New Jersey.