<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
x Quarterly report pursuant to Section 13 or 15(d) of the Securities
----- Exchange Act of 1934
For the quarterly period ended June 30, 1994 or
Transition report pursuant to Section 13 or 15(d) of the Securities
----- Exchange Act of 1934
For the transition period from _______________ to _______________
Commission file number 1-9356
BUCKEYE PARTNERS, L.P.
----------------------
(Exact name of registrant as specified in its charter)
Delaware 23-2432497
- - ------------------------------- --------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3900 Hamilton Boulevard
Allentown, PA 18103
- - ------------------------------- --------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: 610-820-8300
--------------------
Not Applicable
- - ---------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report).
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at July 14, 1994
- - ------------------------- ----------------------------
Limited Partnership Units 12,016,060 Units
<PAGE>
BUCKEYE PARTNERS, L. P.
INDEX
Page No.
--------
Part I. Financial Information
- - ------- ---------------------
Item 1. Consolidated Financial Statements
Consolidated Statements of Income 1
for the three months and six months
ended June 30, 1994 and 1993
Consolidated Balance Sheets 2
June 30, 1994 and December 31, 1993
Consolidated Statements of Cash Flows 3
for the six months ended June 30, 1994
and 1993
Notes to Financial Statements 4-6
Item 2. Management's Discussion and Analysis 7-9
of Financial Condition and Results
of Operations
Part II Other Information
- - ------- -----------------
Item 1. Legal Proceedings 10
Item 6. Exhibits and Reports on Form 8-K 10
i
<PAGE>
Part I - Financial Information
Item 1. Consolidated Financial Statements
- - -------------------------------------------
Buckeye Partners, L.P.
Consolidated Statements of Income
(In thousands, except per Unit amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
- - ----------------------- --------------------
1994 1993 1994 1993
---- ---- ---- ----
<C> <C> <S> <C> <C>
$46,114 $42,152 Revenue $ 91,733 $ 83,581
------ ------ ------- -------
Costs and expenses
22,744 21,096 Operating expenses 44,745 41,360
2,809 2,752 Depreciation and amortization 5,621 5,506
2,507 2,531 General and administrative expenses 5,112 5,208
------ ------ ------- -------
28,060 26,379 Total costs and expenses 55,478 52,074
------ ------ ------- -------
18,054 15,773 Operating income 36,255 31,507
------ ------ ------- -------
Other income (expense)
317 242 Interest income 537 406
(6,139) (6,421) Interest and debt expense (12,584) (12,887)
(219) 171 Minority interests and other (411) 77
------ ------ ------- -------
(6,041) (6,008) Total other income (expense) (12,458) (12,404)
------ ------ ------- -------
Income from continuing operations
12,013 9,765 before extraordinary charge 23,797 19,103
- - Loss from discontinued operations - (127)
Extraordinary charge on early
- - extinguishment of debt (1,569) -
------ ------ ------- -------
$12,013 $ 9,765 Net income $ 22,228 $ 18,976
====== ====== ======= =======
Net income allocated to General
$ 120 $ 98 Partner $ 222 $ 190
Net income allocated to Limited
$11,893 $ 9,667 Partners $ 22,006 $ 18,786
Income allocated to General and
Limited Partners per Partnership Unit:
Income from continuing operations
$ 0.99 $ 0.81 before extraordinary charge $ 1.96 $ 1.58
- - Loss from discontinued operations - (0.01)
Extraordinary charge on early
- - extinguishment of debt (0.13) -
------ ------ ------- -------
$ 0.99 $ 0.81 Net income $ 1.83 $ 1.57
====== ====== ======= =======
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
Buckeye Partners, L.P.
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
--------- -----------
(Unaudited)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 14,717 $ 22,748
Temporary investments 8,985 250
Trade receivables 15,875 15,341
Inventories 1,129 1,174
Prepaids and other current assets 4,089 4,445
-------- --------
Total current assets 44,795 43,958
Property, plant and equipment, net 499,178 499,075
Other non-current assets 360 460
-------- --------
Total assets $544,333 $543,493
======== ========
Liabilities and partners' capital
Current liabilities
Current portion of long-term debt $ 8,000 $ 16,000
Accounts payable 1,868 2,562
Accrued and other current liabilities 23,717 19,687
-------- --------
Total current liabilities 33,585 38,249
Long-term debt 224,000 224,000
Minority interests 2,550 2,492
Other non-current liabilities 44,818 45,057
Commitments and contingent liabilities - -
-------- --------
Total liabilities 304,953 309,798
-------- --------
Partners' capital
General Partner 2,394 2,338
Limited Partners 236,986 231,357
-------- --------
Total partners' capital 239,380 233,695
-------- --------
Total liabilities and partners'
capital $544,333 $543,493
======== ========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
Buckeye Partners, L.P.
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------------
1994 1993
---- ----
<S> <C> <C>
Cash flows from operating activities:
Income from continuing operations before
extraordinary charge $ 23,797 $ 19,103
-------- --------
Adjustments to reconcile income to net cash
provided by operating activities:
Extraordinary charge on early
extinguishment of debt (1,569) -
Depreciation and amortization 5,621 5,506
Minority interests 231 (77)
Distributions to minority interests (173) (342)
Change in assets and liabilities:
Trade receivables (534) 2,196
Inventories 45 (23)
Prepaids and other current assets 356 (804)
Accounts payable (694) 697
Accrued and other current liabilities (a) 4,030 4,541
Other non-current assets 100 -
Other non-current liabilities (a) (239) 751
-------- --------
Total adjustments 7,174 12,445
-------- --------
Net cash provided by continuing operating
activities 30,971 31,548
Net cash provided by discontinued
operations (b) - 206
-------- --------
Net cash provided by operating activities 30,971 31,754
-------- --------
Cash flows from investing activities:
Capital expenditures (5,119) (5,549)
Proceeds from sale of net assets of
discontinued operations - 9,200
Proceeds from (expenditures for) disposal of
property, plant and equipment, net (605) (835)
Purchases of temporary investments, net (8,735) (1,200)
-------- --------
Net cash (used in) provided by investing
activities (14,459) 1,616
-------- --------
Cash flows from financing activities:
Capital contribution 4 -
Proceeds from exercise of unit options 428 -
Proceeds from issuance of long-term debt 15,000 -
Payment of long-term debt (23,000) (8,750)
Distributions to Unitholders (16,975) (15,758)
-------- --------
Net cash used in financing activities (24,543) (24,508)
-------- --------
Net (decrease) increase in cash and cash
equivalents (8,031) 8,862
Cash and cash equivalents at beginning of period 22,748 9,753
-------- --------
Cash and cash equivalents at end of period $ 14,717 $ 18,615
======== ========
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 12,669 $ 13,102
Non-cash changes in property, plant and
equipment - 602
(a) Non-cash changes in accrued and other
liabilities - 2,657
(b) Non-cash changes in discontinued operations - 3,259
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
BUCKEYE PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying consolidated financial
statements of Buckeye Partners, L.P. (the "Partnership"), which are unaudited
except for the Balance Sheet as of December 31, 1993, which is derived from
audited financial statements, include all adjustments necessary to present
fairly the Partnership's financial position as of June 30, 1994 and the
results of operations and cash flows for the three month and six month periods
ended June 30, 1994 and 1993. Certain amounts in the consolidated financial
statements for 1993 have been reclassified to conform to the current
presentation.
Pursuant to the rules and regulations of the Securities and Exchange
Commission, the financial statements do not include all of the information and
notes normally included with financial statements prepared in accordance with
generally accepted accounting principles. These financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Partnership's Annual Report on Form 10-K for the year
ended December 31, 1993.
2. CONTINGENCIES
The Partnership and its subsidiaries (the "Operating Partnerships"), in the
ordinary course of business, are involved in various claims and legal
proceedings, some of which are covered in whole or in part by insurance. The
General Partner is unable to predict the timing or outcome of these claims and
proceedings. Although it is possible that one or more of these claims or
proceedings, if adversely determined, could, depending on the relative amounts
involved, have a material effect on the Partnership's results of operations
for a future period, the General Partner does not believe that their outcome
will have a material effect on the Partnership's consolidated financial
condition.
Environmental
Certain Operating Partnerships (or their predecessors) have been named as a
defendant in lawsuits or have been notified by federal or state authorities
that they are a potentially responsible party ("PRP") under federal laws or a
respondent under state laws relating to the generation, disposal, or release
of hazardous substances into the environment. These proceedings generally
relate to potential liability for clean-up costs. The total potential
remediation costs relating to these clean-up sites cannot be reasonably
estimated. With respect to each site, however, the Operating Partnership
involved is one of several or as many as several hundred PRPs that would share
in the total costs of clean-up under the principle of joint and several
liability. The General Partner believes that the generation, handling and
disposal of hazardous substances have been in material compliance with
applicable environmental and regulatory requirements. Additional claims for
the cost of cleaning up releases of hazardous substances and for damage to the
environment resulting from the activities of the Operating Partnerships or
their predecessors may be asserted in the future under various federal and
state laws. Although the Partnership has made a provision for certain legal
expenses relating to these matters, the General Partner is unable to determine
the timing or final outcome of these pending proceedings or of any future
claims and proceedings.
4
<PAGE>
BUCKEYE PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Guaranteed Investment Contract
The Buckeye Pipe Line Company Retirement and Savings Plan (the "Plan") holds a
guaranteed investment contract ("GIC") issued by Executive Life Insurance
Company ("Executive Life"), which entered conservatorship proceedings in the
State of California in April 1991. The GIC was purchased in July 1989, with
an initial principal investment of $7.4 million earning interest at an
effective rate per annum of 8.98 percent through June 30, 1992. As a result
of the conservatorship proceedings, no payment of principal or interest was
made on the maturity date. A Plan of Rehabilitation was approved by the
Superior Court of the State of California, and the Rehabilitation Plan was
consummated on September 3, 1993. Various policy holders and creditors have,
however, appealed certain aspects of the Plan of Rehabilitation, including the
priority status of entities such as the Plan which purchased GICs subsequent
to January 1, 1989. Pursuant to the Plan of Rehabilitation, the Plan has
received an interest only contract from Aurora National Life Assurance Company
in substitution for its Executive Life GIC. The contract provides for semi-
annual interest payments through the date of maturity of the contract which
will be September 1998. In addition, the Plan is to receive certain
additional cash payments, the amounts of which cannot be accurately estimated
at this time, over the next five years pursuant to the Plan of Rehabilitation.
The timing and amount of payment with respect to the GIC is dependent upon the
outcome of the pending appeals as well as clarification of various provisions
of the Rehabilitation Plan. In May 1991, the General Partner, in order to
safeguard the basic retirement and savings benefits of its employees,
announced its intention to enter an arrangement with the Plan that would
guarantee that the Plan would receive at least its initial principal
investment of $7.4 million plus interest at an effective rate per annum of 5
percent from July 1, 1989. The General Partner intends to effectuate its
commitment through an agreement with the Plan that would provide, under
certain circumstances and subject to Department of Labor approval, for its
purchase of the Plan's rights with respect to the GIC. The costs and expenses
of the General Partner's employee benefit plans are reimbursable by the
Partnership under the applicable limited partnership and management
agreements. The General Partner believes that an adequate provision has been
made for costs which may be incurred by the Partnership in connection with the
above mentioned guarantee.
3. EARLY EXTINGUISHMENT OF DEBT
In March 1994, Buckeye Pipe Line Company, L.P. ("Buckeye") entered into an
agreement to issue $15 million of additional First Mortgage Notes, Series N,
bearing interest at a rate of 7.93 percent. The proceeds from the issuance of
these First Mortgage Notes, plus additional amounts approximating $1.6
million, were used to purchase U.S. Government securities. These securities
were deposited into an irrevocable trust to complete a partial in-substance
defeasance of Buckeye's 9.72 percent, Series I, First Mortgage Notes. The
funds in the trust will be used solely to satisfy the interest due and
principal in the amount of $15 million due at maturity in December 1996.
Accordingly, such U.S. Government securities and $15 million of the 9.72
percent, Series I, First Mortgage Notes have been excluded from the June 30,
1994 balance sheet. The debt extinguishment resulted in an extraordinary
charge of $1,569,000.
5
<PAGE>
BUCKEYE PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. PARTNERS' CAPITAL
Partners' capital consists of the following:
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
-------- --------- ---------
<S> <C> <C> <C>
(In thousands)
Partners' Capital - 1/1/94 $2,338 $231,357 $233,695
Net Income 222 22,006 22,228
Distributions (170) (16,805) (16,975)
Capital Contribution 4 - 4
Exercise of Unit Options - 428 428
------ -------- --------
Partners' Capital - 6/30/94 $2,394 $236,986 $239,380
====== ======== ========
</TABLE>
Earnings per unit is calculated on the basis of the weighted average number of
units outstanding. The potential dilution represented by units issuable from
the exercise of outstanding unit options is less than three percent and is
therefore not reflected in the earnings per unit presentation. The weighted
average number of units outstanding used to calculate earnings per unit was as
follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------- ------------ ---------- ----------
1994 1993 1994 1993
------------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Units outstanding from
beginning of period 12,121,212 12,121,212 12,121,212 12,121,212
Weighted average number
of units issued upon
exercise of unit options 9,268 - 4,633 -
---------- ---------- ---------- ----------
Weighted average number
of units outstanding 12,130,480 12,121,212 12,125,845 12,121,212
========== ========== ========== ==========
</TABLE>
5. CASH DISTRIBUTIONS
The Partnership will generally make quarterly cash distributions of
substantially all of its available cash, generally defined as consolidated
cash receipts less consolidated cash expenditures and such retentions for
working capital, anticipated cash expenditures and contingencies as the
General Partner deems appropriate or as are required by the terms of the
Mortgage Note Indenture.
The Partnership has declared a cash distribution of $.70 per unit payable on
August 31, 1994 to unitholders of record on August 8, 1994. The total
distribution will amount to approximately $8,496,000.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
------- ---------------------------------------------------------------
Results of Operations
---------------------
The following is a discussion of the liquidity and capital resources and the
results of operations of the Partnership for the periods indicated below.
Amounts in the Management's Discussion and Analysis of Financial Condition and
Results of Operations relate to continuing operations unless otherwise
indicated. This discussion should be read in conjunction with the
consolidated financial statements and notes thereto, which are included
elsewhere in this report.
RESULTS OF OPERATIONS
---------------------
Second Quarter
--------------
Revenue for the second quarter 1994 was $46.1 million, $3.9 million or 9.2
percent greater than revenue of $42.2 million for the second quarter 1993.
Volume for the second quarter 1994 was 1,022,300 barrels per day, 74,200
barrels per day or 7.8 percent greater than volume of 948,100 barrels per day
for the second quarter 1993. Greater volume and revenue for the second
quarter 1994 compared with the second quarter 1993 was related to increased
gasoline and distillate volume and the effect of tariff rate increases
implemented in August 1993. Distillate volume increased 20 percent over the
second quarter last year primarily due to the building of low sulfur diesel
fuel inventories. Gasoline volume increased 5 percent over the second quarter
last year primarily due to market share growth in western Pennsylvania and New
England, as well as lower refinery production in the Midwest that resulted in
increased pipeline transportation of gasoline into the region.
Costs and expenses for the second quarter 1994 were $28.1 million, $1.7
million or 6.4 percent greater than costs and expenses of $26.4 million for
the second quarter 1993. Increased expenses during the second quarter 1994,
which were primarily related to the transportation of additional volume,
included maintenance services, operating power and various accruals for
environmental costs.
Other income (expenses), which is the net of non-operating income and
expenses, was a net expense of $6.0 million for the second quarter of each of
the years 1994 and 1993. Substantially all of other income (expenses) is
related to interest expense.
First Six Months
----------------
Revenue for the first six months 1994 was $91.7 million, $8.1 million or 9.7
percent greater than revenue of $83.6 million for the first six months 1993.
Volume for the first six months 1994 was 1,032,200 barrels per day, 75,900
barrels per day or 7.9 percent greater than volume of 956,300 barrels per day
for the first six months 1993. Greater revenue during the first six months
1994 related primarily to increased distillate and gasoline deliveries and the
effect of tariff rate increases implemented in August 1993. Distillate volume
increased 24 percent over the first six months last year in response to higher
demand for heating fuel during severe weather conditions in most of the
Partnership's service area and a build-up in low sulfur diesel fuel
inventories. Gasoline volume increased approximately 4 percent, compared to
the first six months 1993, due to restricted barge transportation during the
severe cold period, reduced Canadian imports to upstate New York and market
share growth in western Pennsylvania and New England, as well as lower
refinery production in the Midwest that resulted in increased pipeline
transportation of gasoline into the region.
7
<PAGE>
Costs and expenses for the first six months 1994 were $55.5 million, $3.4
million or 6.5 percent greater than costs and expenses of $52.1 million for
the first six months 1993. Increased expenses during the first six months
1994, which were primarily related to the transportation of additional volume,
included maintenance services, operating power, payroll, supplies and various
accruals for environmental costs.
Other income (expenses) was a net expense of $12.4 million for the first six
months of each of the years 1994 and 1993. Substantially all of other income
(expenses) is related to interest expense. Such interest expense for the
first six months 1994 was effected by a lower weighted average cost of debt
and costs associated with the issuance of an additional $15,000,000 in First
Mortgage Notes and the concurrent partial in-substance defeasance of
previously issued First Mortgage Notes. See Note 3 to Consolidated Financial
Statements.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Partnership's financial condition at June 30, 1994 is highlighted in the
following comparative summary:
<TABLE>
<CAPTION>
Liquidity and Capital Indicators
----------------------------------------
As of
-------------------------
6/30/94 12/31/93
-------- --------
<S> <C> <C>
Current ratio 1.3 to 1 1.1 to 1
Ratio of cash and cash equivalents,
temporary investments and trade
receivables to current liabilities 1.2 to 1 1.0 to 1
Working capital (in thousands) $11,210 $5,709
Ratio of total debt to total capital .49 to 1 .50 to 1
Book value (per Unit) $19.72 $19.28
</TABLE>
The Partnership's cash flow from operations is generally sufficient to meet
current working capital requirements. In addition, the Partnership maintains
$26.0 million in short-term credit facilities under which there are no current
outstanding borrowings.
Cash Provided by Operations
---------------------------
For the six months ended June 30, 1994, cash provided by operations of $31.0
million was derived principally from income from continuing operations of
$23.8 million, depreciation of $5.6 million and operating working capital
changes of $3.2 million. Changes in operating working capital were primarily
due to an increase in accrued and other current liabilities. Remaining net
cash uses, which amounted to $1.6 million, were largely related to an
extraordinary charge on the early extinguishment of debt. See "Debt
Obligation and Credit Facilities" below.
For the six months ended June 30, 1993, cash provided by operations of $31.8
million was derived principally from income from continuing operations of
$19.1 million, depreciation of $5.5 million, operating working capital changes
of $6.6 million and $0.8 million from increases in other non-current
liabilities. Changes in operating working capital were largely due to
decreases in trade receivables and increases in accrued and other current
liabilities. Remaining net cash uses, which amounted to $0.2 million were the
result of minority interest distributions offset by cash from discontinued
operations.
8
<PAGE>
Debt Obligation and Credit Facilities
-------------------------------------
At June 30, 1994, the Partnership had $232.0 million in outstanding current
and long-term debt representing the First Mortgage Notes of Buckeye. The
First Mortgage Notes are collateralized by substantially all of Buckeye's
property, plant and equipment. Debt outstanding at June 30, 1994 includes $15
million of additional First Mortgage Notes, Series N, bearing interest at a
rate of 7.93 percent which were issued on April 11, 1994 in accordance with an
agreement entered into in March 1994. Such current and long-term debt
excludes $15 million of 9.72 percent First Mortgage Notes, Series I, due
December 1996, which were defeased in-substance with the proceeds of the
Series N First Mortgage Notes. In addition, during the first six months of
1994, Buckeye irrevocably deposited $8.0 million with the trustee to be
applied to payment of the 9.33 percent First Mortgage Notes, Series G, due
December 1994. Comparable deposits during the first six months 1993
aggregated $8.8 million and were applied to payment of the 9.16 percent First
Mortgage Notes, Series F, due December 1993.
The indenture pursuant to which the First Mortgage Notes were issued was
amended in March 1994 by a Fourth Supplemental Indenture to permit Buckeye to
issue additional First Mortgage Notes under certain circumstances; provided
that the aggregate principal amount of First Mortgage Notes outstanding after
such issuance does not exceed $275 million.
The Partnership has established a $15 million unsecured short-term revolving
credit facility with a commercial bank. This facility, which has options to
extend borrowings through September 1999, is available to the Partnership for
general purposes, including capital expenditures and working capital. In
addition, Buckeye has a $10 million short-term line of credit secured by
accounts receivable. Laurel Pipe Line Company, L.P. has an unsecured $1
million line of credit. At June 30, 1994, there were no outstanding
borrowings under these facilities.
At June 30, 1994, the ratio of total debt to total capital was 49 percent.
For purposes of the calculation of this ratio, total capital consists of
current and long-term debt, minority interests in subsidiaries and partners'
capital.
Capital Expenditures
--------------------
At June 30, 1994, approximately 92 percent of total consolidated assets
consisted of property, plant and equipment.
Capital expenditures during the six months ended June 30, 1994 totaled $5.1
million compared to $5.5 million during the six months ended June 30, 1993.
During both periods, capital expenditures were paid from internally generated
funds.
Environmental Matters
---------------------
For information concerning the Partnership's environmental matters subsequent
to the Partnership's Annual Report on Form 10-K, see Part II - Other
Information, Item 1 - Legal Proceedings.
9
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
------- ------------------
With respect to legal proceedings arising from the rupture in 1990 of
one of the Partnership's pipelines near Freeport, Pennsylvania referred to
in Item 3 of the Partnership's Form 10-K for the fiscal year ended December
31, 1993, Buckeye Pipe Line Company, L.P. ("Buckeye") recently entered into
discussions with the Pennsylvania Department of Environmental Resources
("DER") and other state agencies concerning the potential settlement of
natural resource damage claims and civil penalties that the state agencies
have indicated they may assert against Buckeye. Buckeye denies any liability
for these claims. These discussions are at a preliminary stage. Buckeye
continues to believe that, with respect to the Freeport rupture, its net
expense after insurance recoveries will not be material to its financial
condition or results of operations.
Buckeye has been notified by the Michigan Department of Natural
Resources ("MDNR") that the MDNR considered Buckeye to be a potentially
responsible party ("PRP") under the Michigan Environmental Response Act and
the Comprehensive Environmental Response Compensation and Liability Act with
respect to certain groundwater contamination alleged to exist in the
vicinity of Sable Road, Oakland County, Michigan. In its notification
letter, the MDNR asserted that contaminated groundwater plumes had impacted
drinking water wells. The MDNR has demanded that Buckeye and two other PRPs
develop and implement a MDNR-approved remedial action plan with respect to
the contaminated groundwater plumes and reimburse MDNR approximately $1
million in response costs that the MDNR claims to have incurred to date in
connection with the site. Buckeye believes that its pipeline in the vicinity
of the groundwater plumes has not been a source of groundwater contaminants
and that Buckeye has no responsibility with respect to past or future
clean-up costs at the site. Buckeye's liability, if any, cannot be estimated
at this time.
Item 6. Exhibits and Reports on Form 8-K
------- --------------------------------
(a) Exhibits
11 - Computation of earnings per unit.
(b) No reports on Form 8-K were filed during the quarter ended June 30, 1994.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUCKEYE PARTNERS, L.P.
(Registrant)
By: Buckeye Management Company,
as General Partner
Dated: July 19, 1994 By: /s/ E. R. Varalli
------------------------------
E. R. Varalli
Executive Vice President,
Chief Financial Officer and
Treasurer
(Principal Accounting and
Financial Officer)
<PAGE>
Index to Exhibits
-----------------
Exhibit Number Description Page
- - -------------- ----------- ----
11 Computation of Earnings Per Unit
<PAGE>
EXHIBIT (11)
<PAGE>
EXHIBIT (11)
BUCKEYE PARTNERS, L.P.
COMPUTATION OF EARNINGS PER UNIT
(In thousands, except for Units and per Unit amounts)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
------------------------ --------------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income from continuing operations
before extraordinary charge $ 12,013 $ 9,765 $ 23,797 $ 19,103
Loss from discontinued operations - - - (127)
Extraordinary charge on early
extinguishment of debt - - (1,569) -
----------- ----------- ----------- -----------
Net income (loss) $ 12,013 $ 9,765 $ 22,228 $ 18,976
=========== =========== =========== ===========
Primary earnings per Unit:
Income from continuing operations
before extraordinary charge $ 0.99 $ 0.80 $ 1.96 $ 1.57
Loss from discontinued operations - - - (0.01)
Extraordinary charge on early
extinguishment of debt - - (0.13) -
----------- ----------- ----------- -----------
Net income $ 0.99 $ 0.80 $ 1.83 $ 1.56
=========== =========== =========== ===========
Fully-diluted earnings per Unit:
Income from continuing operations
before extraordinary charge $ 0.99 $ 0.80 $ 1.96 $ 1.57
Loss from discontinued operations - - - (0.01)
Extraordinary charge on early
extinguishment of debt - - (0.13) -
----------- ----------- ----------- -----------
Net income $ 0.99 $ 0.80 $ 1.83 $ 1.56
=========== =========== =========== ===========
Weighted average number of Units
outstanding:
Units outstanding at June 30 12,130,480 12,121,212 12,125,845 12,121,212
Exercise of Options reduced by the
number of Units purchased with
proceeds (Primary) 20,611 16,791 23,225 15,483
----------- ----------- ----------- -----------
Total Units outstanding - Primary 12,151,091 12,138,003 12,149,070 12,136,695
=========== =========== =========== ===========
Units outstanding at June 30 12,130,480 12,121,212 12,125,845 12,121,212
Exercise of Options reduced by the
number of Units purchased with
proceeds (Fully-diluted) 20,592 16,791 23,067 16,791
----------- ----------- ----------- -----------
Total Units outstanding -
Fully-diluted 12,151,072 12,138,003 12,148,912 12,138,003
=========== =========== =========== ===========
</TABLE>
Although not required to be presented in the income statement under provisions
of APB Opinion No. 15, this calculation is submitted in accordance with
Regulations S-K item 601(b)(11).
