BUSINESS SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2018

The following tables provide information about our revenue types by reportable segment for the periods indicated (in thousands). Prior periods have been disaggregated for comparison purposes.



	Three Months Ended June 30,
	2018
	Domestic Pipelines & Terminals			Global Marine Terminals		Merchant Services		Intersegment Eliminations			Total
Revenue from contracts with customers
Pipeline transportation	$	127,959		$	—	$	—	$	(2,163	)	$	125,796
Terminalling and storage services	100,981			99,927		—		(9,730		)	191,178
Product sales	—			7		455,185		(1,889		)	453,303
Other services	10,694			320		1,920		(15		)	12,919
Total revenue from contracts with customers	239,634			100,254		457,105		(13,797		)	783,196
Revenue from leases	11,065			42,889		—		—			53,954
Commodity derivative contracts, net	(819		)	—		104,508		—			103,689
Total revenue	$	249,880		$	143,143	$	561,613	$	(13,797	)	$	940,839



	Three Months Ended June 30,
	2017
	Domestic Pipelines & Terminals		Global Marine Terminals		Merchant Services		Intersegment Eliminations			Total
Revenue from contracts with customers
Pipeline transportation	$	123,819	$	—	$	—	$	(4,208	)	$	119,611
Terminalling and storage services	106,053		123,930		—		(6,154		)	223,829
Product sales	—		3,880		307,027		(1,282		)	309,625
Other services	14,562		328		2,538		(32		)	17,396
Total revenue from contracts with customers	244,434		128,138		309,565		(11,676		)	670,461
Revenue from leases	9,119		39,718		—		—			48,837
Commodity derivative contracts, net	96		—		90,903		(96		)	90,903
Total revenue	$	253,649	$	167,856	$	400,468	$	(11,772	)	$	810,201



	Six Months Ended June 30,
	2018
	Domestic Pipelines & Terminals			Global Marine Terminals		Merchant Services		Intersegment Eliminations			Total
Revenue from contracts with customers
Pipeline transportation	$	249,430		$	—	$	—	$	(5,803	)	$	243,627
Terminalling and storage services	216,956			201,145		—		(18,323		)	399,778
Product sales	—			20		1,098,693		(5,242		)	1,093,471
Other services	22,783			341		4,820		(1,362		)	26,582
Total revenue from contracts with customers	489,169			201,506		1,103,513		(30,730		)	1,763,458
Revenue from leases	19,055			85,722		—		—			104,777
Commodity derivative contracts, net	(2,909		)	—		256,528		2,090			255,709
Total revenue	$	505,315		$	287,228	$	1,360,041	$	(28,640	)	$	2,123,944



	Six Months Ended June 30,
	2017
	Domestic Pipelines & Terminals		Global Marine Terminals		Merchant Services		Intersegment Eliminations			Total
Revenue from contracts with customers
Pipeline transportation	$	239,756	$	—	$	—	$	(7,191	)	$	232,565
Terminalling and storage services	215,639		249,662		—		(13,733		)	451,568
Product sales	—		3,891		751,161		(5,007		)	750,045
Other services	27,553		430		4,530		(1,715		)	30,798
Total revenue from contracts with customers	482,948		253,983		755,691		(27,646		)	1,464,976
Revenue from leases	20,246		78,349		—		—			98,595
Commodity derivative contracts, net	3,967		—		215,903		(3,967		)	215,903
Total revenue	$	507,161	$	332,332	$	971,594	$	(31,613	)	$	1,779,474

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 June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Revenue:
United States	$	878,607	$	730,905	$	2,000,827	$	1,618,767
International	62,232		79,296		123,117		160,707
Total revenue	$	940,839	$	810,201	$	2,123,944	$	1,779,474

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

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



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Reconciliation of Net Income to Adjusted EBITDA:
Net income	$	93,317		$	116,379		$	210,409		$	242,688
Less: Net income attributable to noncontrolling interests	(1,413		)	(3,657		)	(6,132		)	(6,390		)
Net income attributable to Buckeye Partners, L.P.	91,904			112,722			204,277			236,298
Add: Interest and debt expense	59,566			56,424			118,671			112,309
Income tax expense	782			1,039			1,272			1,261
Depreciation and amortization ⁽¹⁾	66,569			64,838			130,707			130,326
Non-cash unit-based compensation expense	7,976			8,902			16,666			17,580
Acquisition and transition expense ⁽²⁾	141			799			423			1,828
Hurricane-related costs, net of recoveries ⁽³⁾	(1,393		)	613			(812		)	3,016
Proportionate share of Adjusted EBITDA for the equity method investment in VTTI ⁽⁴⁾	34,640			28,801			69,180			57,418
Less: Gains on property damage recoveries ⁽⁵⁾	(450		)	(4,621		)	(14,535		)	(4,621		)
Earnings from the equity method investment in VTTI ⁽⁴⁾	(4,882		)	(326		)	(9,272		)	(8,715		)
Adjusted EBITDA	$	254,853		$	269,191		$	516,577		$	546,700

Adjusted EBITDA:
Domestic Pipelines & Terminals	$	135,321		$	135,387		$	275,972		$	274,830
Global Marine Terminals	120,728			131,757			238,146			262,388
Merchant Services	(1,196		)	2,047			2,459			9,482
Total Adjusted EBITDA	$	254,853		$	269,191		$	516,577		$	546,700


(1)	Includes 100% of the depreciation and amortization expense of $18.2 million and $18.5 million for Buckeye Texas for the three months ended June 30, 2018 and 2017, respectively, and $36.0 million for both six months ended June 30, 2018 and 2017. In April 2018, we acquired our business partner’s 20% ownership interest in Buckeye Texas, and as a result, we now own 100% of Buckeye Texas.


(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 which occurred in 2017 and 2016, consisting of operating expenses and write-offs of damaged long-lived assets, net of insurance recoveries.

(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 gains on recoveries, which during 2018, settled property damages caused by third parties, primarily related to a 2012 vessel allision with a jetty at our BBH facility in the Bahamas, as well as a 2014 allision with a ship dock at our terminal located in Pennsauken, New Jersey in the prior year.