2.2.0.25falsefalse0201 - Disclosure - Organization and Basis of Presentationtruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011 USD ($) USD ($) / shares $Jan-01-2011_Mar-31-2011http://www.sec.gov/CIK0000805022duration2011-01-01T00:00:002011-03-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0PureStandardhttp://www.xbrl.org/2003/instancepurexbrli0USDUSD$2true0us-gaap_GeneralPoliciesAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseOrganization and Basis of Presentation [Abstract]3false0us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00  <div align="left" style="font-family: 'Times New Roman',Times,serif">   <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b> </b> </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”), and its limited partnership units representing limited partner interests (“LP Units”) are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “BPL.” 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 limited partnership that was previously publicly traded on the NYSE prior to BGH’s merger with a wholly owned subsidiary of Buckeye (see below for further information). 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 69 active products terminals that provide aggregate storage capacity of over 53 million barrels. In 2011, we closed the acquisition of the Bahamas Oil Refining Company International Limited (“BORCO”) terminal facility in Freeport, Grand Bahama, The Bahamas, with a total installed capacity of approximately 21.6 million barrels (see Note 2). In addition, we operate and maintain approximately 2,700 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 high performance 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. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We operate and report in five business segments: Pipelines & Terminals; International Operations; Natural Gas Storage; Energy Services; and Development & Logistics. Effective January 1, 2011, we realigned our five business segments. We combined the Pipeline Operations and Terminalling & Storage segments into one segment, the Pipelines & Terminals segment, and moved our terminal in Yabucoa, Puerto Rico, previously included as part of the Terminalling & Storage segment, and the BORCO facility to a new International Operations segment. See Note 20 for a discussion of our business segments. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On November 19, 2010, we consummated a transaction pursuant to a plan and agreement of merger (the “Merger Agreement”) with our general partner, BGH, BGH’s general partner and Grand Ohio, LLC (“Merger Sub”), our subsidiary. Pursuant to the Merger Agreement, Merger Sub was 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 was cancelled, the general partner units held by our general partner (representing an approximate 0.5% general partner interest in us) were converted to a non-economic general partner interest, all of the economic interest in BGH was acquired by us and BGH unitholders received aggregate consideration of approximately 20.0 million of our LP Units. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     BGH is considered the surviving consolidated entity for accounting purposes, although Buckeye is the surviving consolidated entity for legal and reporting purposes. The Merger was accounted for as an equity transaction. Therefore, changes in BGH’s ownership interest as a result of the Merger did not result in gain or loss recognition. Costs incurred associated with the Merger were charged directly to partners’ capital. </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 March 31, 2011, Services Company owned approximately 1.8% of our LP Units. Services Company employees provide services to our operating subsidiaries. Pursuant to a services agreement entered into in December 2004, our operating subsidiaries reimburse Services Company for the costs of the services provided by Services Company. Services Company has been consolidated into our financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">   <i>Basis of Presentation and Principles of Consolidation</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     These consolidated financial statements reflect the financial results of BGH for periods prior to the effective date of the Merger. The Merger was accounted for as an equity transaction, and as such, changes in BGH’s ownership interest as a result of the Merger did not result in gain or loss recognition. Under applicable accounting guidance, the exchange of BGH’s units for our LP Units was accounted for as a BGH equity issuance and BGH was the surviving entity for accounting purposes. Although BGH was the surviving entity for accounting purposes, Buckeye was the surviving entity for legal purposes; consequently, the name on these financial statements for periods prior to the Merger has been changed from “Buckeye GP Holdings L.P.” to “Buckeye Partners, L.P.” </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The reconciliation of Buckeye’s net income, as historically reported, to the net income reported in these financial statements for the three months ended March 31, 2010 is as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Buckeye’s net income, as previously reported </div></td> <td> </td> <td align="left">$</td> <td align="right">52,278</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Adjustments: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Depreciation and amortization (1) </div></td> <td> </td> <td> </td> <td align="right">1,116</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Costs and expenses (2) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(2,645</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other (3) </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(107</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net income </div></td> <td> </td> <td align="left">$</td> <td align="right">50,642</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td>Represents the amortization of the market value of LP Units issued in August 1997 in connection with the restructuring of Services Company’s ESOP. The market value of those LP Units was $64.2 million, and this amount was recorded as a deferred charge and is being amortized on a straight-line basis over 13.5 years. This deferred charge was not previously included in Buckeye’s net income because Services Company was consolidated with BGH, but not Buckeye, for periods prior to the effective date of the Merger.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(2)</td> <td> </td> <td>Amounts include payroll and benefits costs, professional fees, certain state franchise taxes, insurance costs and miscellaneous other expenses incurred by BGH.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(3)</td> <td> </td> <td>Includes interest expense on Services Company’s debt and commitment fees on BGH’s credit facility. The interest expense was not previously included in Buckeye’s net income because Services Company was consolidated with BGH, but not Buckeye, for periods prior to the effective date of the Merger.</td> </tr> </table> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Pursuant to the Merger Agreement, BGH’s unitholders received a total of approximately 20.0 million of Buckeye’s LP Units in the aggregate in exchange for all outstanding BGH common units and management units. As a result, the number of Buckeye’s LP Units outstanding increased from 51.6 million to 71.4 million on the date of the Merger. However, for historical reporting purposes, the impact of this change was accounted for as a reverse split of BGH’s units of 0.705 to 1.0, together with the addition of Buckeye’s existing LP Units. Therefore, since BGH was the surviving accounting entity, the weighted average number of LP Units outstanding used for basic and diluted earnings per unit calculations are BGH’s historical weighted average common units outstanding adjusted for the reverse unit split and the addition of Buckeye’s existing units. Amounts reflecting historical BGH unit and per unit amounts included in this report have been restated for the reverse unit split. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules of the U.S. Securities and Exchange Commission (“SEC”). The financial statements include our accounts on a consolidated basis. We have eliminated all intercompany transactions in consolidation. The consolidated financial statements include the financial results of our wholly-owned subsidiaries and the financial results of Services Company on a consolidated basis. </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>Fair Value Measurements</i></u>. In January 2010, the Financial Accounting Standards Board (“FASB”) issued guidance that requires new disclosures related to fair value measurements. The new guidance requires expanded disclosures related to a gross presentation for Level 3 activity. The new accounting guidance is 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, 2011. We have included the enhanced disclosure requirements regarding fair value measurements in Note 14. </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">     <u><i>Intangibles, Goodwill and Other</i></u>. In December 2010, the FASB issued guidance that amended the goodwill impairment test for reporting units with zero or negative carrying amounts. The objective of this new guidance is to address questions about entities with reporting units with zero or negative carrying amounts because some entities concluded that the first step of the goodwill impairment test is passed in those circumstances because the fair value of their reporting unit will generally be greater than zero. The new guidance is effective for fiscal years and interim periods, within those years, beginning after December 15, 2010. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <u><i>Business Combinations</i></u>. In December 2010, the FASB issued guidance that clarifies disclosures related to pro forma information for business combinations that occurred in the current period. The amendments specify that if an entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The new guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. We have included the enhanced disclosure requirements regarding pro forma information for business combinations in Note 2. </div> <div align="left"> <a name="110"></a> </div> </div>  <!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescription containing the entire organization, consolidation and basis of presentation of financial statements disclosure. 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