2.2.0.7 false Organization and Basis of Presentation 0201 - Disclosure - Organization and Basis of Presentation true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Organization and Basis of Presentation [Abstract] 0 us-gaap_GeneralPoliciesAbstract us-gaap true na duration No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string No definition available. false 3 ORGANIZATION AND BASIS OF PRESENTATION 1 us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div align="left" style="font-family: 'Times New Roman',Times,serif">   <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt"><i> </i> </div> <div align="left"> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. ORGANIZATION AND BASIS OF PRESENTATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">  <i>Partnership Organization</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Buckeye Partners, L.P. is a publicly traded Delaware master limited partnership (“MLP”), the limited partner units (“LP Units”) of which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “BPL.” As used in these Notes to Unaudited Condensed Consolidated Financial Statements, “<i>we</i>,” “<i>us</i>,” “<i>our</i>” and “<i>Buckeye</i>” mean Buckeye Partners, L.P. and, where the context requires, includes our subsidiaries. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We were formed in 1986 and own and operate 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 and 67 active products terminals that provide aggregate storage capacity of approximately 27.2 million barrels. In addition, we operate and maintain approximately 2,400 miles of other pipelines under agreements with major oil and gas, petrochemical and chemical companies, and perform certain engineering and construction management services for third parties. We also own and operate a major natural gas storage facility in northern California, and are a wholesale distributor of refined petroleum products in the United States in areas also served by our pipelines and terminals. We operate and report in five business segments: Pipeline Operations; Terminalling & Storage; Natural Gas Storage; Energy Services; and Development & Logistics. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Buckeye GP LLC (“Buckeye GP”) is our general partner. Buckeye GP is a wholly owned subsidiary of Buckeye GP Holdings L.P. (“BGH”), a Delaware MLP that is also publicly traded on the NYSE under the ticker symbol “BGH.” </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Buckeye Pipe Line Services Company (“Services Company”) was formed in 1996 in connection with the establishment of the Buckeye Pipe Line Services Company Employee Stock Ownership Plan (the “ESOP”). At June 30, 2010, Services Company owned approximately 3.0% of our LP Units. Services Company employees provide services to our operating subsidiaries. Pursuant to a services agreement entered into in December 2004 (the “Services Agreement”), our operating subsidiaries reimburse Services Company for the costs of the services provided by Services Company. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt">  <i>Agreement and Plan of Merger</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On June 10, 2010, we and our general partner entered into an Agreement and Plan of Merger (the “Merger Agreement”) with BGH, its general partner and Grand Ohio, LLC (“Merger Sub”), our subsidiary, pursuant to which Merger Sub will be merged into BGH, with BGH as the surviving entity (the “Merger”). In the transaction, the incentive compensation agreement (also referred to as the incentive distribution rights) held by our general partner will be cancelled, the general partner units held by our general partner (representing an approximate 0.5% general partner interest in us) will be converted to a non-economic general partner interest, all of the economic interest in BGH will be acquired by us and BGH unitholders will receive aggregate consideration of approximately 20.0 million of our LP Units. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The terms of the Merger Agreement were unanimously approved by the audit committee of the board of directors of our general partner (“Audit Committee”), and by the board of directors of BGH’s general partner. Additionally, the majority unitholder of BGH, BGH GP Holdings, LLC, and ArcLight Energy Partners Fund III, L.P., ArcLight Energy Partners Fund IV, L.P., Kelso Investment Associates VII, L.P., and KEP VI, LLC have executed a Support Agreement (“Support Agreement”) agreeing to vote in favor of the Merger and against any alternative transaction. The Support Agreement will automatically terminate if the board of directors of the general partner of BGH changes its recommendation to BGH’s unitholders with respect to the Merger or the Merger Agreement is terminated. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     After the Merger, the board of directors of our general partner is expected to consist of nine members, three of whom are expected to be the existing independent members of our Audit Committee, one of whom is expected to be the existing chief executive officer of our general partner and three of whom are expected to be the three existing independent members of the audit committee of the board of directors of BGH’s general partner. In addition, BGH’s general partner, which will own a non-economic general partner interest in BGH and will continue to be owned by BGH GP Holdings, LLC, will have the right and authority to designate two additional members of the board of directors, subject to reduction if BGH GP Holdings, LLC’s ownership of our LP Units drops below certain thresholds. The remaining seven members of our general partner’s board of directors will be elected by holders of our LP Units. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Merger Agreement is subject to, among other things, approval by the affirmative vote of the holders of a majority of our LP Units outstanding and entitled to vote at a meeting of the holders of our LP Units, approval by the (a) affirmative vote of holders of a majority of BGH’s common units and (b) affirmative vote of holders of a majority of BGH’s common units and management units, voting together as a single class, and the effectiveness of a registration statement on Form S-4 with respect to the issuance of the LP Units in connection with the Merger. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Merger will be accounted for as an equity transaction. Therefore, changes in BGH’s ownership interest as a result of the Merger will not result in gain or loss recognition. BGH will be considered the surviving consolidated entity for accounting purposes, while we will be the surviving consolidated entity for legal and reporting purposes. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We incurred $1.8 million of costs associated with the Merger during the three and six months ended June 30, 2010, of which $1.3 million has been paid. We charged these costs directly to partners’ capital. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt">  <i>Basis of Presentation</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of our management, of a normal and recurring nature and necessary for a fair statement of our financial position as of June 30, 2010, and the results of our operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2010 are not necessarily indicative of results of our operations for the 2010 fiscal year. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). We have eliminated all intercompany transactions in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations. These interim financial statements should be read in conjunction with our consolidated financial statements and notes thereto presented in our Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on February 26, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt">  <i>Reclassifications</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Certain prior year amounts have been reclassified in the condensed consolidated statements of operations and condensed consolidated statements of cash flows to conform to the current-year presentation. The reclassification in the condensed consolidated statements of operations is as follows: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Earnings from equity investments are now presented on a separate line item in the condensed consolidated statements of operations for the three and six months ended June 30, 2009. The other investment income that had previously been included with earnings from equity investments has been reclassified and included in “Other income” in the 2009 period.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The reclassification in the condensed consolidated statements of cash flows is as follows: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>We have separately disclosed cash flows from the issuance of long-term debt and borrowings under our credit facility for the six months ended June 30, 2009. These amounts had been included within the same line item in the 2009 period.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     These reclassifications had no impact on net income (loss) or cash flows from operating, investing or financing activities. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top: 0pt"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt">  <i>Recent Accounting Developments</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <u><i>Consolidation of Variable Interest Entities (“VIEs”)</i></u>. In June 2009, the Financial Accounting Standards Board (“FASB”) amended consolidation guidance for VIEs. The objective of this new guidance is to improve financial reporting by companies involved with VIEs. This guidance requires each reporting company to perform an analysis to determine whether the company’s variable interest or interests give it a controlling financial interest in a VIE. The new guidance was effective for us on January 1, 2010. The adoption of this guidance did not have an impact on our consolidated financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <u><i>Fair Value Measurements</i></u>. In January 2010, the FASB issued guidance that requires new disclosures related to fair value measurements. The new guidance requires expanded disclosures related to transfers between Level 1 and 2 activities and a gross presentation for Level 3 activity. The new accounting guidance is effective for fiscal years and interim periods beginning after December 15, 2009, except for the new disclosures related to Level 3 activities, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those years. The new guidance became effective for us on January 1, 2010, except for the new disclosures related to Level 3 activities, which will be effective for us on January 1, 2011. We have included the enhanced disclosure requirements regarding fair value measurements in Note 13. </div> <div align="left"> </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. 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