Buckeye Partners, L.P. (BPL), last month, announced the financial results for the third quarter of 2014. The reported income from continuing operations of $107.0 million was more when compared to income from continuing operations for the third quarter of 2013 of $83.6 million.
Management Comments:
"We are extremely pleased with the strong financial performance across all of our segments during the third quarter," said Clark C. Smith, Chairman, President and Chief Executive Officer. "Contributions from the terminals acquired from Hess Corporation and our recent growth capital projects drove the improvement in our Pipelines & Terminals and Global Marine Terminals segments. The integration of the former Hess terminals is now complete and these terminals continue to deliver strong performance exceeding our expectations. Buckeye's continued diversification into crude oil also contributed to the strong growth, as the 1.1 million barrel crude oil storage project in the Chicago Complex became operational during the quarter.
"Our Merchant Services segment also had a successful quarter. With new leadership, we rationalized the size and scope of our business model and drove improved performance by focusing on optimizing asset utilization across the Buckeye system where the commodity risk can be efficiently and effectively limited. Strong rack margins, improved market conditions and expanded use of deal structures that limit commodity risk all contributed to Merchant Services' performance for the quarter."
Operations And Results:
Adjusted EBITDA from continuing operations for Q3 2014 was $200.6 million compared to $156.2 million for the third quarter of 2013. The company has surely done well on that front. Income from continuing operations (generated by share holdings and debentures) was approximately $0.89 per diluted unit for the last quarter. The company’s performance was far better when compared to $0.77 per diluted unit for the third quarter of 2013. The diluted weighted average number of units outstanding in the third quarter of 2014 was 119.4 million compared to 106.8 million in the third quarter of 2013.
The company, in accordance with its general partner, announced a cash distribution of $1.125 per limited partner unit for the quarter ended September 30, 2014. The distribution will be payable after November 25, 2014. This cash distribution represents an almost five percent increase over the $1.075 per LP Unit distribution declared for the quarter ended September 30, 2013.
Distributable cash flow from continuing operations for the third quarter of 2014 was $140.5 million compared to $98.6 million for the third quarter of 2013. The company also has improved distribution coverage of 0.99 times for the third quarter of 2014. Excluding the effects from the 6.75 million new units issued in September, Buckeye’s distribution coverage for the third quarter would be 1.04 times, as put by the industry experts. Going by the announcements, the company would be willing to distribute equity and returns generously. The goings have been very good and taking a cue from this, I for one, would put my money on Buckeye.
