21. PARTNERS’ CAPITAL AND DISTRIBUTIONS

Our LP Units represent limited partner interests, which give the holders thereof the right to participate in distributions and to exercise the other rights and privileges available to them under our partnership agreement. The partnership agreement provides that, without prior approval of our limited partners holding an aggregate of at least two-thirds of the outstanding LP Units, we cannot issue any LP Units of a class or series having preferences or other special or senior rights over the LP Units. Prior to the Merger, in accordance with our partnership agreement, capital accounts are maintained for our general partner and limited partners. In conjunction with the Merger, our partnership agreement was amended. See Note 1 for further information.

Class B Units represent a separate class of our limited partnership interests. The Class B Units share equally with the LP Units (i) with respect to the payment of distributions and (ii) in the event of our liquidation. We have the option to pay distributions on the Class B Units with cash or by issuing additional Class B Units, with the number of Class B Units issued based upon the volume-weighted average price of the LP Units for the 10 trading days immediately preceding the date the distributions are declared, less a discount of 15%. The Class B Units have the same voting rights as if they were outstanding LP Units and are entitled to vote as a separate class on any matters that materially adversely affect the rights or preferences of the Class B Units in relation to other classes of partnership interests or as required by law. The Class B Units will convert into LP Units on a one-for-one basis on the earlier of (a) the date on which at least 4 million barrels of incremental storage capacity are placed in service by BORCO or (b) the third anniversary of the closing of the BORCO acquisition.

Equity Offering

On April 15, 2011, we issued 5,520,000 LP Units, which included 720,000 LP Units issued as part of the overallotment option, in an underwritten public offering at a public offering price of $59.41 per LP Unit. Total proceeds from the offering, including the overallotment option and after the underwriters’ discount of $1.99 per LP Unit and offering expenses, were approximately $316.6 million, and were used to reduce amounts outstanding under our Prior BPL Credit Facility.

On January 18 and 19, 2011, we issued 5,794,725 LP Units and 1,314,870 Class B Units to institutional investors for aggregate consideration of approximately $425.0 million to fund a portion of the BORCO acquisition. On January 18, 2011, we issued 2,483,444 LP Units and 4,382,889 Class B Units to First Reserve as $400.0 million of consideration to fund a portion of the BORCO acquisition. On February 16, 2011, we issued 620,861 LP Units and 1,095,722 Class B Units to Vopak as $100.0 million of consideration to fund a portion of the BORCO acquisition. Equity issuance costs incurred on these transactions were approximately $4.6 million. The remaining purchase price was funded with cash on hand at closing and borrowings under our Prior BPL Credit Facility. See Note 3 for further information on the BORCO acquisition.

Summary of Changes in Outstanding Units

The following is a summary of changes in Buckeyes’ and BGH’s outstanding units for the periods indicated (in thousands):

		0000000000			0000000000			0000000000			0000000000		0000000000
	General Partner			Limited Partners			Management Units			Class B Units		Total (1)
Units outstanding on January 1, 2009		3			27,767			530			—		28,300
Conversion of management units to common units		—			4			(4	)		—		—

Units outstanding at December 31, 2009		3			27,771			526			—		28,300
Cancellation of BGH units in connection with Merger (2)		(3	)		(27,771	)		(526	)		—		(28,300	)
Buckeye LP Units issued to BGH unitholders (2)		—			19,951			—			—		19,951
Buckeye LP Units outstanding on date of Merger		—			51,557			—			—		51,557
Cancellation of LP Units in connection with Merger (3)		—			(80	)		—			—		(80	)
LP Units issued pursuant to the Option Plan		—			8			—			—		8

Units outstanding at December 31, 2010		—			71,436			—			—		71,436
LP Units issued pursuant to the Option Plan		—			97			—			—		97
LP Units issued pursuant to the LTIP		—			16			—			—		16
Issuance of units to First Reserve and Vopak as consideration for BORCO acquisition		—			3,104			—			5,479		8,583
Issuance of units to institutional investors (4)		—			5,795			—			1,315		7,110
Issuance of units in underwritten public offering		—			5,520			—			—		5,520
Issuance of Class B Units in lieu of quarterly cash distribution		—			—			—			511		511

Units outstanding at December 31, 2011		—			85,968			—			7,305		93,273

(1)	Amounts presented through the date of the Merger represent historical BGH units outstanding.

(2)	On November 19, 2010, in connection with the Merger, BGH units outstanding were converted into LP Units at a ratio of 0.705 to 1.0. Buckeye issued approximately 20.0 million LP Units to BGH’s unitholders. On November 19, 2010, Buckeye had approximately 51.6 million LP Units outstanding.

(3)	In connection with the Merger, 80,000 LP Units held by BGH were cancelled.

(4)	Proceeds were used to fund a portion of the BORCO acquisition.

Cash Distributions

We generally make quarterly cash distributions to unitholders of substantially all of our available cash, generally defined in our partnership agreement as consolidated cash receipts less consolidated cash expenditures and such retentions for working capital, anticipated cash expenditures and contingencies as our general partner deems appropriate. Cash distributions paid to unitholders of Buckeye for the periods indicated were as follows (in thousands, except per LP Unit amounts):

	0000000000		0000000000		0000000000		0000000000		0000000000
Record Date	Payment Date	Amount Per LP Unit		Limited Partners		General Partner (1)		Total Cash Distributions
February 12, 2009	February 27, 2009	$	0.8875	$	42,930	$	10,721	$	53,651
May 11, 2009	May 29, 2009		0.9000		46,227		11,686		57,913
August 7, 2009	August 31, 2009		0.9125		46,877		11,965		58,842
November 12, 2009	November 30, 2009		0.9250		47,719		12,251		59,970

Total				$	183,753	$	46,623	$	230,376


February 16, 2010	February 26, 2010	$	0.9375	$	48,425	$	12,543	$	60,968
May 17, 2010	May 28, 2010		0.9500		49,048		12,835		61,883
August 16, 2010	August 31, 2010		0.9625		49,778		13,121		62,899
November 15, 2010	November 30, 2010		0.9750		50,432		13,402		63,834

Total				$	197,683	$	51,901	$	249,584


February 21, 2011	February 28, 2011	$	0.9875	$	79,603	$	—	$	79,603
May 16, 2011	May 31, 2011		1.0000		86,153		—		86,153
August 15, 2011	August 31, 2011		1.0125		87,236		—		87,236
November 14, 2011	November 30, 2011		1.0250		88,377		—		88,377

Total				$	341,369	$	—	$	341,369

(1)	Includes amounts paid to our general partner for its incentive distribution rights.

Cash distributions paid to unitholders of BGH for the periods indicated were as follows (in thousands, except per unit amounts):


Record Date	Payment Date	Amount Per Unit		Total Cash Distributions
February 12, 2009	February 27, 2009	$	0.330	$	9,339
May 11, 2009	May 29, 2009		0.350		9,905
August 7, 2009	August 31, 2009		0.370		10,472
November 12, 2009	November 30, 2009		0.390		11,036

Total				$	40,752


February 16, 2010	February 26, 2010	$	0.410	$	11,603
May 17, 2010	May 28, 2010		0.430		12,169
August 16, 2010	August 31, 2010		0.450		12,735
November 15, 2010	November 30, 2010		0.470		13,301

Total				$	49,808

In-kind Distributions

In-kind distributions paid to Class B unitholders of Buckeye for the periods indicated were as follows:


Record Date	Payment Date	Units
February 21, 2011	February 28, 2011		122,244
May 16, 2011	May 31, 2011		127,046
August 15, 2011	August 31, 2011		133,068
November 14, 2011	November 30, 2011		129,041

Total			511,399

On February 10, 2012, we announced a quarterly distribution of $1.0375 per LP Unit that will be paid on February 29, 2012, to unitholders of record on February 21, 2012. Total cash distributed to LP Unitholders on February 29, 2012 will total approximately $89.5 million. We also expect to issue approximately 141,120 Class B Units in lieu of cash distributions on February 29, 2012, to Class B unitholders of record on February 21, 2012.