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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    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 1-32963
 Buckeye GP Holdings L.P.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    11-3776228(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer
Identification number)One Greenway Plaza 
Suite 600
Houston, TX
    
    77046(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (832) 615-8600
 Securities registered pursuant to Section 12(b) of the Act:
 Title
of each class
    
    Name of each exchange on
which registeredCommon Units representing limited partnership interests
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
  o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    29Item 1B.
    
    Unresolved Staff Comments
    
    
    46Item 2.
    
    Properties
    
    
    47Item 3.
    
    Legal Proceedings
    
    
    47Item 4.
    
    [Reserved]
    
    
    47PART IIItem 5.
    
    Market for the Registrants Common Units, Related Unitholder Matters, and Issuer Purchases of Common Units
    
    
    48Item 6.
    
    Selected Financial Data
    
    
    49Item 7.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    50Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    74Item 8.
    
    Financial Statements and Supplementary Data
    
    
    77Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    133Item 9A.
    
    Controls and Procedures
    
    
    133Item 9B.
    
    Other Information
    
    
    133PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    134Item 11.
    
    Executive Compensation
    
    
    138Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters
    
    
    139Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    141Item 14.
    
    Principal Accounting Fees and Services
    
    
    145PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    146EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 The information contained in this Annual Report on Form 10-K (this Report) include
forward-looking statements. All statements that express belief, expectation, estimates or
intentions, as well as those that are not statements of historical facts, are forward-looking
statements. Such statements use forward-looking words such as proposed, anticipate, project,
potential, could, should, continue, estimate, expect, may, believe, will, plan,
seek, outlook and other similar expressions that are intended to identify forward-looking
statements, although some forward-looking statements are expressed differently. These statements
discuss future expectations and contain projections. Specific factors that could cause actual
results to differ from those in the forward-looking statements include, but are not limited to:
(1) our ability to pay distributions to our unitholders; (2) our expected receipt of distributions
and incentive distributions from Buckeye Partners, L.P. Buckeye); (3) anticipated trends in
Buckeyes business; (4) price trends and overall demand for refined petroleum products and natural
gas in the United States in general and in Buckeyes service areas in particular (economic
activity, weather, alternative energy sources, conservation and technological advances may affect
price trends and demands); (5) competitive pressures from other transportation services or
alternative fuel sources; (6) changes, if any, in laws and regulations, including, among others,
safety, environmental, tax and accounting matters or Federal Energy Regulatory Commission
regulation of Buckeyes tariff rates; (7) liability for environmental claims; (8) nonpayment or
nonperformance by Buckeyes customers; (9) security issues affecting Buckeyes assets, including,
among others, potential damage to its assets caused by vandalism, acts of war or terrorism;
(10) construction costs, unanticipated capital expenditures and operating expenses to repair or
replace Buckeyes assets; (11) availability and cost of insurance on our and Buckeyes assets and
operations; (12) Buckeyes ability to successfully identify, complete and integrate strategic
acquisitions and make cost saving changes in operations; (13) expansion in the operations of
Buckeyes competitors; (14) shut-downs or production cutbacks at major refineries that use
Buckeyes services; (15) deterioration in Buckeyes labor relations; (16) regional economic
conditions; (17) changes in real property tax assessments; (18) disruptions to the air travel
system; (19) interest rate fluctuations and other capital market conditions; (20) our future
results of operations; (21) our liquidity and ability to finance our activities; (22) market
conditions in Buckeyes industry; (23) conflicts of interest between Buckeye, its general partner
and us; (24) the treatment of Buckeye or us as a corporation for federal income tax purposes or if
we or Buckeye become subject to entity-level taxation for state tax purposes; and (25) the ability
to realize the anticipated benefits from Buckeyes organizational restructuring. These factors are
not necessarily all of the important factors that could cause actual results to differ materially
from those expressed in any of our forward-looking statements. Other known or unpredictable
factors could also have material adverse effects on future results. Consequently, all of the
forward-looking statements made in this document are qualified by these cautionary statements, and
we cannot assure you that actual results or developments that we anticipate will be realized or,
even if substantially realized, will have the expected consequences to or effect on us or our
business or operations. Also note that we provide additional cautionary discussion of risks and
uncertainties under the captions Risk Factors, Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this Report.
 The forward-looking statements contained in this Report speak only as of the date hereof.
Although the expectations in the forward-looking statements are based on our current beliefs and
expectations, we do not assume responsibility for the accuracy and completeness of such statements.
Except as required by federal and state securities laws, we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new information, future
events or any other reason. All forward-looking statements attributable to us or any person acting
on our behalf are expressly qualified in their entirety by the cautionary statements contained or
referred to in this Report and in our future periodic reports filed with the U.S. Securities and
Exchange Commission (SEC). In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this Report may not occur.
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PART I
 
 Item 1. Business
 Buckeye GP Holdings L.P .
  we us our BGH Buckeye
     3




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Buckeye Partners, L.P.
  Operating Subsidiaries
 
    
    Buckeye Pipe Line Company, L.P.(Buckeye Pipe Line), which owns an approximately
2,643-mile refined petroleum products pipeline system serving major population centers
in eight states. As a part of its service territory, Buckeye Pipe Line is the primary
jet fuel transporter to certain airports, including John F. Kennedy International
Airport (JFK Airport), LaGuardia Airport and Newark Liberty International Airport
(Newark Airport).
    
    Laurel Pipe Line Company, L.P.(Laurel), which owns an approximately 345-mile
refined petroleum products pipeline connecting four Philadelphia area refineries to ten
delivery points across Pennsylvania.
    
    Wood River Pipe Lines LLC(Wood River), which owns eight refined petroleum
products pipelines with aggregate mileage of approximately 1,287 miles located in
Illinois, Indiana, Missouri and Ohio. Wood River includes two pipelines that Buckeye
acquired from ConocoPhillips in November 2009. See 2009 Developments below for
further information.
    
    Buckeye Pipe Line Transportation LLC(BPL Transportation), which owns a refined
petroleum products pipeline system with aggregate mileage of approximately 478 miles
located in New Jersey, New York and Pennsylvania.
    
    Everglades Pipe Line Company, L.P.(Everglades), which owns an approximately
37-mile refined petroleum products pipeline connecting Port Everglades, Florida to Ft.
Lauderdale-Hollywood International Airport and Miami International Airport. Everglades
is the primary jet fuel transporter to Miami International Airport.
    
    Buckeye Pipe Line Holdings, L.P.(BPH), which, through certain of its
subsidiaries, owns (or in certain instances leases from Buckeyes other Operating
Subsidiaries) 62 refined petroleum and other products terminals (of which 59 are
included in our Terminalling and Storage segment and three are included in our Pipeline
Operations segment) with aggregate storage capacity of approximately 26.2 million
barrels and 574 miles of pipelines in the Midwest and West Coast. BPHs terminal
holdings include three terminals that we acquired from ConocoPhillips in November 2009.
See 2009 Developments below for further information. BPH operates, through its
subsidiaries, terminals and pipelines for third parties. BPH also holds noncontrolling
stock interests in two Midwest refined petroleum products pipelines and a natural gas
liquids (NGLs) pipeline system.
    
    Buckeye Gas Storage LLC(Buckeye Gas),which, through its subsidiary Lodi Gas
Storage, L.L.C. (Lodi Gas), owns a natural gas storage facility in northern
California that provides approximately 40 Bcf of total natural gas storage capacity
(including pad gas).
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
    
    Buckeye Energy Holdings LLC(Buckeye Energy), which, through its subsidiary
Buckeye Energy Services LLC (BES), markets refined petroleum products in areas served
by our pipelines and terminals and also owns five refined petroleum product terminals
with aggregate storage capacity of 1.0 million barrels located in northeastern and
central Pennsylvania.
  
 Business Strategy
   
    
    Generate stable cash flows;
    
    Improve operating efficiencies and asset utilization;
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
    
    Generate increased cash distributions to its unitholders;
    
    Grow its portfolio of predictable and stable fee-based businesses combined with
opportunistic revenue generating capabilities;
    
    Operate in a safe and environmentally responsible manner; and
    
    Maintain an investment-grade credit rating.
  
    
    Acquiring, building and operating high quality, strategically located assets;
 
    
    Maintaining stable long-term customer relationships, including by providing superior
customer service;
    
    Maintaining and enhancing the integrity of its pipelines, terminals and storage assets;
    
    Maintaining a solid, conservative financial position;
    
    Optimizing its portfolio of pipeline, terminalling and storage assets;
    
    Pursuing strategic cash flow accretive acquisitions that:
 
    
    Complement its existing footprint;
    
    Provide geographic, product and/or asset class diversity;
    
    Leverage existing management capabilities and infrastructure; and
 
    
    Building an experienced management team with the objective to grow its business.
 2009 Developments
 Reorganization
   Asset Impairment and Subsequent Sale of the Assets
  6




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Refined Petroleum Product Terminals and Pipeline Assets Acquisition
  Completion of Kirby Hills Phase II Expansion Project
  Debt Financings
   Equity Offering
  2009 LTIP
   7




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Business Activities
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Revenue
    
    
    Percent
    
    
    Revenue
    
    
    Percent
    
    
    Revenue
    
    
    PercentPipeline Operations
    
    $
    392,667
    
    
    
    22.3
    %
    
    $
    387,267
    
    
    
    20.4
    %
    
    $
    379,345
    
    
    
    73.0
    %Terminalling and Storage
    
    
    136,576
    
    
    
    7.7
    %
    
    
    119,155
    
    
    
    6.3
    %
    
    
    103,782
    
    
    
    20.0
    %Natural Gas Storage
    
    
    99,163
    
    
    
    5.6
    %
    
    
    61,791
    
    
    
    3.3
    %
    
    
    
    
    
    
    Energy Services
    
    
    1,125,013
    
    
    
    63.5
    %
    
    
    1,295,925
    
    
    
    68.3
    %
    
    
    
    
    
    
    Development and Logistics
    
    
    34,136
    
    
    
    1.9
    %
    
    
    43,498
    
    
    
    2.3
    %
    
    
    36,220
    
    
    
    7.0
    %Intersegment
    
    
    (17,183
    )
    
    
    -1.0
    %
    
    
    (10,984
    )
    
    
    -0.6
    %
    
    
    
    
    
    
    Total
    
    $
    1,770,372
    
    
    
    100.0
    %
    
    $
    1,896,652
    
    
    
    100.0
    %
    
    $
    519,347
    
    
    
    100.0
    %
 Pipeline Operations Segment
   8




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Year Ended December 31,2009
    
    
    2008
    
    
    2007Volume
    
    
    Percent
    
    
    Volume
    
    
    Percent
    
    
    Volume
    
    
    PercentGasoline
    
    
    650.1
    
    
    
    49.6
    %
    
    
    673.5
    
    
    
    48.7
    %
    
    
    717.9
    
    
    
    49.6
    %Jet fuel
    
    
    336.7
    
    
    
    25.7
    %
    
    
    354.7
    
    
    
    25.7
    %
    
    
    362.7
    
    
    
    25.1
    %Middle distillates (1)
    
    
    284.7
    
    
    
    21.7
    %
    
    
    304.2
    
    
    
    22.0
    %
    
    
    320.1
    
    
    
    22.1
    %NGLs (2)
    
    
    13.9
    
    
    
    1.1
    %
    
    
    20.9
    
    
    
    1.5
    %
    
    
    20.4
    
    
    
    1.4
    %Other products
    
    
    24.5
    
    
    
    1.9
    %
    
    
    28.9
    
    
    
    2.1
    %
    
    
    26.3
    
    
    
    1.8
    %Total (3)
    
    
    1,309.9
    
    
    
    100.0
    %
    
    
    1,382.2
    
    
    
    100.0
    %
    
    
    1,447.4
    
    
    
    100.0
    %
 
 (1)
    
    Includes diesel fuel, heating oil, kerosene and other middle distillates.(2)
    
    Represents volumes transported by the Buckeye NGL pipeline, which we sold effective
January 1, 2010.(3)
    
    Excludes local product transfers.  PennsylvaniaNew YorkNew Jersey
    IllinoisIndianaMichiganMissouriOhio
  9




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Other Refined Petroleum Products Pipelines
    Equity Investments
    10




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Terminalling and Storage Segment
     Year Ended December 31,2009
    
    
    2008
    
    
    2007Products throughput (1)
    
    
    444,900
    
    
    
    457,400
    
    
    
    482,300
 
 (1)
    
    Reported quantities exclude transfer volumes, which are non-revenue generating
transfers among our various terminals. For the years ended December 31, 2008 and 2007, we
previously reported 537.7 thousand and 568.6 thousand barrels, respectively, which included
transfer volumes. 11




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StorageNumber of
    
    
    CapacityState
    
    Terminals (1)
    
    
    (000s Barrels)Connecticut
    
    
    1
    
    
    
    345Illinois
    
    
    9
    
    
    
    3,161Indiana
    
    
    10
    
    
    
    8,910Massachusetts
    
    
    1
    
    
    
    106Michigan
    
    
    11
    
    
    
    3,992Missouri
    
    
    2
    
    
    
    345New York
    
    
    10
    
    
    
    4,111Ohio
    
    
    8
    
    
    
    2,871Pennsylvania
    
    
    4
    
    
    
    1,131Wisconsin
    
    
    3
    
    
    
    734Total
    
    
    59
    
    
    
    25,706
 
 (1)
    
    In addition, we have three terminals which are included in the Pipelines Operations
segment for reporting purposes. There is a terminal in each of the states of California (with
storage capacity of 0.1 million barrels), Nevada (with storage capacity of 0.1 million
barrels) and Tennessee (with storage capacity of 0.3 million barrels). We also have five
terminals in Pennsylvania with aggregate storage capacity of approximately 1.0 million
barrels. These terminals are included in the Energy Services segment for reporting purposes
(as discussed below). Natural Gas Storage Segment
      12




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Energy Services Segment
    Year Ended December 31,2009
    
    
    2008Sales volumes
    
    
    655,100
    
    
    
    435,200
  
    
    Wholesale Rack  liquid fuels and propane gas are delivered to distributors and large
commercial customers. These customers take delivery of the products using the Energy
Services segments automated truck loading equipment to fill their own trucks.
    
    Wholesale Delivered  liquid fuels are delivered to commercial customers, construction
companies, school districts, and trucking companies using third-party carriers.
    
    Branded Gasoline  the Energy Services segment delivers, through third-party carriers,
gasoline and on-highway diesel fuel to independently owned retail gas stations under many
leading gasoline brands.
  13




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Development and Logistics Segment
   Competition and Customers
 Competitive Strengths
  
    
    Buckeye operates in a safe and environmentally responsible manner;
    
    Buckeye owns and operates high quality assets that are strategically located;
    
    Buckeye has stable, long-term relationships with its customers;
    
    Buckeye owns relatively predictable and stable fee-based businesses with
opportunistic revenue generating capabilities;
    
    Buckeye maintains a conservative financial position with its investment-grade credit
rating; and
    
    Buckeye has an experienced management team whose interests are aligned with those of
its unitholders.
 Pipeline Operations and Terminalling and Storage Segments
    14




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Natural Gas Storage Segment
  Energy Services Segment
  Development and Logistics
  15




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Customers
  Seasonality
    Employees
  Capital Expenditures
    16




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Regulation
 General
   Rate Regulation
   +
  17




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Environmental Regulation
     18




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Pipeline and Terminal Maintenance and Safety Regulation
    19




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Tax Considerations for Unitholders
   UNITHOLDERS ARE URGED TO CONSULT, AND SHOULD DEPEND ON, THEIR OWN TAX ADVISORS IN ANALYZING THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM OF THE OWNERSHIP OR DISPOSITION OF
COMMON UNITS.
 20




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Characterization of BGH for Tax Purposes
      Flow-Through of Taxable Income
  21




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Potential U.S. Tax Legislation Change
  Treatment of Our Distributions
   Basis of Common Units
  Loss Limitations
  22




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Deductibility of Interest Expense
  
    
    interest on indebtedness properly allocable to property held for investment;
    
    our interest expense attributed to portfolio income; and
    
    the portion of interest expense incurred to purchase or carry an interest in a
passive activity to the extent attributable to portfolio income.
  23




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Entity Level Collections
  Allocation of Income, Gain, Loss and Deduction
    
    
    his relative contributions to us;
    
    the interests of all the Unitholders in profits and losses;
    
    the interest of all the Unitholders in cash flow; and
    
    the rights of all the Unitholders to distributions of capital upon liquidation.
 Treatment of Short Sales
  
    
    any of our income, gain, loss or deduction with respect to those units would not be
reportable by the Unitholder;
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
    
    any cash distributions received by the Unitholder as to those Common Units would be
fully taxable; and
    
    all of these distributions would appear to be ordinary income.
  Alternative Minimum Tax
  Tax Rates
  Section 754 Election
    Accounting Method and Taxable Year
  25




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Tax Treatment of Operations
   Valuation of Properties
  Disposition of Common Units
     26




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
    
    a short sale;
    
    an offsetting notional principal contract; or
    
    a futures or forward contract with respect to the partnership interest or
substantially identical property.
  Allocations Between Transferors and Transferee
    Notification Requirements
  27




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Constructive Termination
  Withholding
  Unrelated Business Taxable Income
 ACCORDINGLY, TAX-EXEMPT ENTITIES SUCH
AS INDIVIDUAL RETIREMENT ACCOUNTS, PENSION PLANS AND CHARITABLE TRUSTS ARE ENCOURAGED TO CONSULT
THEIR PROFESSIONAL TAX ADVISORS REGARDING THE TAX IMPLICATIONS OF THEIR OWNERSHIP OF COMMON UNITS.
 Foreign Unitholders
  28




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Regulated Investment Companies
  State Tax Treatment
  Certain Tax Consequences to Unitholders
  Available Information
 www.sec.gov www.buckeyegp.com
 www.nyse.com
 
 Item 1A. Risk Factors
  29




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Risks Inherent in our Dependence on Distributions from Buckeye
 Our primary cash-generating assets are our general partner interests in Buckeye, which consist
primarily of general partner units and the incentive distribution rights in Buckeye. Our cash flow
is, therefore, directly dependent upon the ability of Buckeye to make cash distributions to its
partners.
  
    
    fluctuations in prices for refined petroleum and natural gas products and overall
demand for such products in the United States in general, and in Buckeyes service
areas in particular (economic activity, weather, alternative energy sources,
conservation and technological advances may affect petroleum product prices and
demand);
    
    changes in laws and regulations, including environmental, safety and tax laws and
regulations and the regulation of Buckeyes tariff rates;
    
    liability for environmental claims;
    
    availability and cost of insurance on Buckeyes assets and operations;
    
    shut-downs or cutbacks at major refineries that supply petroleum products
transported on Buckeyes pipelines or stored in Buckeyes terminals;
    
    deterioration in Buckeyes labor relations;
    
    construction costs as well as unanticipated capital expenditures and operating
expenses to repair or replace Buckeyes assets;
    
    competitive pressures from other transportation services or alternative fuel
sources;
    
    prevailing economic conditions; and
    
    disruptions to the air travel system.
  
    
    the level of capital expenditures it makes;
    
    the availability, if any, and cost of acquisitions;
    
    debt service requirements;
    
    fluctuations in working capital needs;
    
    restrictions on distributions contained in Buckeyes Credit Facility, underwritten
publicly issued notes and the BES Credit Agreement;
    
    Buckeyes ability to borrow under its Credit Facility and the BES Credit Agreement;
and
    
    the amount, if any, of cash reserves established by Buckeyes general partner,
Buckeye GP, in its discretion for the proper conduct of Buckeyes business.
  A reduction in Buckeyes distributions will disproportionately affect the amount of cash
distributions to which we are currently entitled.
  30




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Our right to receive incentive distributions will terminate if Buckeyes general partner is
removed.
  Buckeye may issue additional LP Units or other equity securities, which may increase the risk
that Buckeye will not have sufficient available cash to maintain or increase its cash distribution
level per LP Unit.
  In the future, we may not have sufficient cash to maintain the level of our quarterly
distributions.
  Buckeyes practice of distributing all of its available cash may limit its ability to grow,
which could impact distributions to us and the available cash that we have to distribute to our
Unitholders.
  Restrictions in Buckeyes Credit Facility could limit its ability to make distributions to us.
  31




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Risks Inherent in Buckeyes Business
  Changes in petroleum demand and distribution may adversely affect Buckeyes business. In
addition, the current economic downturn could result in lower demand for a sustained period of
time.
     Competition could adversely affect Buckeyes operating results .
  32




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Mergers among Buckeyes customers and competitors could result in lower volumes being shipped
on its pipelines and stored in its terminals, thereby reducing the amount of cash it generate.
  Buckeye may incur liabilities from assets it has acquired.
  33




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##### Table of Contents



A significant decline in production at certain refineries served by certain of Buckeyes
pipelines and terminals could materially reduce the volume of refined petroleum products it
transports and adversely impact its operating results.
  Potential future acquisitions and expansions, if any, may affect Buckeyes business by
substantially increasing the level of its indebtedness and contingent liabilities and increasing
the risks of it being unable to effectively integrate these new operations.
   Buckeyes rate structures are subject to regulation and change by the FERC.
     34




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Climate change legislation or regulations restricting emissions of greenhouse gases or
setting fuel economy or air quality standards could result in increased operating costs or reduced
demand for the refined petroleum products, natural gas and other hydrocarbon products that Buckeye
transports, stores or otherwise handles in connection with its business.
  Environmental regulation may impose significant costs and liabilities on Buckeye.
  
    
    environmental laws, regulations and enforcement policies become more rigorous; or
    
    claims for property damage or personal injury resulting from its operations are
filed.
 Existing or future state or federal government regulations relating to certain chemicals or
additives in gasoline or diesel fuel could require capital expenditures or result in lower pipeline
volumes and thereby adversely affect Buckeyes results of operations and cash flows.
  DOT regulations may impose significant costs and liabilities on Buckeye.
  35




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Buckeyes business is exposed to customer credit risk, against which it may not be able to
fully protect.
   Terrorist attacks could adversely affect Buckeyes business.
   Buckeyes operations are subject to operational hazards and unforeseen interruptions for which
it may not be insured.
  36




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##### Table of Contents



Buckeye may not be able to realize the benefits of the organizational restructuring commenced
in the second quarter of 2009, which could adversely impact its business and financial results.
  Buckeyes natural gas storage business depends on third party pipelines to transport natural
gas.
  A significant decrease in the production of natural gas could have a significant financial
impact on Buckeye.
  Buckeyes results could be adversely affected by volatility in the value of natural gas
storage services, including hub services.
  Buckeyes results could be adversely affected by volatility in the price of refined petroleum
products.
  37




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Buckeyes risk management policies cannot eliminate all commodity risk and any noncompliance
with Buckeyes risk management policies could result in significant financial losses.
  Risks Inherent in Ownership of Our Common Units
 Cost reimbursements due our general partner, MainLine Management, may be substantial and will
reduce our cash available for distribution to our Unitholders.
  Our Unitholders do not elect our general partner or vote on our general partners directors.
An affiliate of our general partner owns a sufficient number of Common Units to allow it to block
any attempt to remove our general partner.
    38




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##### Table of Contents



BGH GP owns a controlling interest in us and owns our general partner and can determine the
outcome of all matters voted upon by our Unitholders.
  The control of our general partner may be transferred to a third party, and that party could
replace our current management team, in each case, without unitholder consent.
  Increases in interest rates may cause the market price of our Common Units to decline.
  If in the future we cease to manage and control Buckeye through our ownership of the general
partner interests in Buckeye, we may be deemed to be an investment company under the Investment
Company Act of 1940.
  You may not have limited liability if a court finds that Unitholder action constitutes control
of our business.
    39




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##### Table of Contents



We are directly dependent on Buckeye for our growth. As a result of the fiduciary obligations
of Buckeyes general partner, which is our wholly owned subsidiary, to the unitholders of Buckeye,
our ability to pursue business opportunities independently may be limited.
  Our credit agreement contains operating and financial restrictions that may limit our business
and financing activities and a default thereunder could result in a change in control of Buckeye
GP.
  
    
    make distributions if any default or event of default occurs;
    
    incur additional indebtedness or guarantee other indebtedness;
    
    grant liens or make certain negative pledges;
    
    make certain loans or investments;
    
    make any material change to the nature of our business, including consolidations,
liquidations and dissolutions; or
    
    enter into a merger, consolidation, sale and leaseback transaction or sale of
assets.
  Risks Related to Conflicts of Interest
 Buckeye GP owes fiduciary duties to Buckeye and Buckeyes Unitholders, which may conflict with
our interests.
   
    
    the allocation of shared overhead expenses to Buckeye and us;
    
    the interpretation and enforcement of contractual obligations between us and our
affiliates, on one hand, and Buckeye, on the other hand;
    
    the determination of the amount of cash to be distributed to Buckeyes partners and
the amount of cash to be reserved for the future conduct of Buckeyes business;
    
    the determination of whether Buckeye should make acquisitions and on what terms;
 40




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##### Table of Contents




    
    the determination of whether Buckeye should use cash on hand, borrow or issue equity
to raise cash to finance acquisitions or expansion capital projects, repay
indebtedness, meet working capital needs, pay distributions or otherwise; and
    
    any decision we make in the future to engage in business activities independent of
Buckeye.
 The fiduciary duties of our general partner may conflict with the fiduciary duties of
Buckeyes general partner.
  Potential conflicts of interest may arise among our general partner, its affiliates and us.
Our general partner has limited fiduciary duties to us and our Unitholders, which may permit it to
favor its own interests to the detriment of us and our Unitholders.
   
    
    our general partner is allowed to take into account the interests of parties other
than us in resolving conflicts of interest, which has the effect of limiting its
fiduciary duty to our Unitholders;
    
    our general partner determines whether we incur debt and that decision may affect
our or Buckeyes credit ratings;
    
    our general partner has limited its liability and has reduced its fiduciary duties
under our partnership agreement, while also restricting the remedies available to our
Unitholders for actions that, without these limitations and reductions, might
constitute breaches of fiduciary duty. As a result of purchasing units, our Unitholders
consent to some actions and conflicts of interest that might otherwise constitute a
breach of fiduciary or other duties under applicable state law;
    
    our general partner controls the enforcement of obligations owed to us by it and its
affiliates;
    
    our general partner decides whether to retain separate counsel, accountants or
others to perform services for us; and
    
    our partnership agreement gives our general partner broad discretion in establishing
financial reserves for the proper conduct of our business. These reserves also will
affect the amount of cash available for distribution.
  
    
    our general partner determines the amount and timing of asset purchases and sales,
capital expenditures, borrowings, issuances of additional partnership securities and
reserves, each of which can affect the amount of cash that is available to be
distributed to our Unitholders;
    
    our general partner determines which costs incurred by it and its affiliates are
reimbursable by us; and
    
    our partnership agreement does not restrict our general partner from causing us to
pay it or its affiliates for any services rendered on terms that are fair and
reasonable to us or entering into additional contractual arrangements with any of these
entities on our behalf.
 
 41




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Our reimbursement of expenses of our general partner will limit our cash available for
distribution.
  Our partnership agreement contains provisions that reduce the remedies available to
Unitholders for actions that might otherwise constitute a breach of fiduciary duty by our general
partner. It will be difficult for a Unitholder to challenge a resolution of a conflict of interest
by our general partner or by its audit committee.
   Our general partners affiliates may compete with Buckeye and us.
  Our executive officers face conflicts in the allocation of their time to our business.
  42




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Our general partner may cause us to issue additional Common Units or other equity securities
without your approval, which would dilute your ownership interests.
  
    
    our Unitholders proportionate ownership interest in us will decrease;
    
    the amount of cash available for distribution on each Common Unit may decrease;
    
    the relative voting strength of each previously outstanding Common Unit may be
diminished; and
    
    the market price of the Common Units may decline.
 Our general partner has a call right that may require you to sell your Common Units at an
undesirable time or price.
  Tax Risks to Common Unitholders
  Our and Buckeyes tax treatment depends on their status as a partnership for federal income
tax purposes as well as not being subject to a material amount of entity-level taxation by
individual states. If the IRS were to treat either us or Buckeye as a corporation for federal
income tax purposes or they were to become subject to additional amounts of entity-level taxation
for state tax purposes, then our cash available for distribution to you would be substantially
reduced.
    43




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##### Table of Contents



If the IRS contests the federal income tax positions that we or Buckeye take, the market for
our Common Units may be adversely impacted and the cost of any IRS contest will reduce our cash
available for distribution to you.
  You will be required to pay taxes on your share of our income even if you do not receive any
cash distributions from us .
  Tax gain or loss on the disposition of our Common Units could be more or less than expected.
  44




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##### Table of Contents



Tax-exempt entities and non-U.S. persons face unique tax issues from owning Common Units that
may result in adverse tax consequences to them.
  We will treat each purchaser of Common Units as having the same tax benefits without regard to
the actual Common Units purchased. The IRS may challenge this treatment, which could adversely
affect the value of the Common Units.
  We prorate items of income, gain, loss and deduction between transferors and transferees of
Common Units each month based upon the ownership of Common Units on the first day of each month,
instead of on the basis of the date a particular Common Unit is transferred. The IRS may challenge
this treatment, which could change the allocation of items of income, gain, loss and deduction
among our Unitholders .
  A Unitholder whose Common Units are loaned to a short seller to cover a short sale of Common
Units may be considered as having disposed of those Common Units. If so, the Unitholder would no
longer be treated for tax purposes as a partner with respect to those Common Units during the
period of the loan and may recognize gain or loss from the disposition.
  We will adopt certain valuation methodologies that may result in a shift of income, gain, loss
and deduction between the general partner and the Unitholders. The IRS may challenge this
treatment, which could adversely affect the value of Common Units.
  45




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##### Table of Contents



The sale or exchange of 50% or more of our capital and profits interests during any
twelve-month period will result in the termination of our partnership for federal income tax
purposes .
  As a result of investing in Common Units, you may become subject to state and local taxes and
return filing requirements in jurisdictions where Buckeye operates or owns or acquires property.
  Buckeye has a subsidiary that is treated as a corporation for federal income tax purposes and
subject to corporate-level income taxes.
  
 Item 1B. Unresolved Staff Comments
  46




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##### Table of Contents



Item 2. Properties
     
 Item 3. Legal Proceedings
    
 Item 4. [Reserved]
 47




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##### Table of Contents



PART II
 
 Item 5. Market for the Registrants Common Units, Related Unitholder Matters, and Issuer Purchases
of Common Units
  2009
    
    
    2008Quarter
    
    High
    
    
    Low
    
    
    High
    
    
    LowFirst
    
    $
    17.25
    
    
    $
    12.75
    
    
    $
    29.92
    
    
    $
    21.65Second
    
    
    20.56
    
    
    
    14.90
    
    
    
    26.44
    
    
    
    18.00Third
    
    
    30.00
    
    
    
    18.17
    
    
    
    22.70
    
    
    
    13.35Fourth
    
    
    30.00
    
    
    
    23.01
    
    
    
    18.72
    
    
    
    9.51
   Amount PerRecord Date
    
    Payment Date
    
    Common UnitFebruary 5, 2008
    
    February 29, 2008
    
    $
    0.285May 9, 2008
    
    May 30, 2008
    
    
    0.300August 8, 2008
    
    August 29, 2008
    
    
    0.310November 7, 2008
    
    November 28, 2008
    
    
    0.320February 12, 2009
    
    February 27, 2009
    
    $
    0.330May 11, 2009
    
    May 29, 2009
    
    
    0.350August 7, 2009
    
    August 31, 2009
    
    
    0.370November 12, 2009
    
    November 30, 2009
    
    
    0.390
    Recent Sales of Unregistered Securities
  Units Authorized for Issuance under Equity Compensation Plan
  48




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Issuer Purchases of Equity Securities
  
 Item 6. Selected Financial Data
   Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Income Statement Data:Revenue (1)
    
    $
    1,770,372
    
    
    $
    1,896,652
    
    
    $
    519,347
    
    
    $
    461,760
    
    
    $
    408,446Depreciation and amortization
    
    
    54,699
    
    
    
    50,834
    
    
    
    40,236
    
    
    
    39,629
    
    
    
    32,408Asset impairment expense
    
    
    59,724
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reorganization expense
    
    
    32,057
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (1) (2)
    
    
    203,800
    
    
    
    246,492
    
    
    
    195,353
    
    
    
    164,873
    
    
    
    155,869Interest and debt expense
    
    
    75,147
    
    
    
    75,410
    
    
    
    51,721
    
    
    
    60,702
    
    
    
    55,366Net income (2)
    
    
    141,637
    
    
    
    180,623
    
    
    
    152,675
    
    
    
    111,800
    
    
    
    106,690Net income attributable to Buckeye
GP Holdings L.P. (1)
    
    
    49,594
    
    
    
    26,477
    
    
    
    22,921
    
    
    
    8,734
    
    
    
    6,986Net income from August 9 to December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,599
    
    
    
    Earnings per limited partner
unit  diluted (3)
    
    $
    1.75
    
    
    $
    0.94
    
    
    $
    0.81
    
    
    $
    0.09
    
    
    $
    Distributions per limited partner unit
    
    
    1.44
    
    
    
    1.22
    
    
    
    0.98
    
    
    
    0.13
    
    
    
    
 December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Balance Sheet Data:Total assets (1)
    
    $
    3,486,571
    
    
    $
    3,263,097
    
    
    $
    2,354,326
    
    
    $
    2,212,585
    
    
    $
    2,040,832Total debt, including current portion
    
    
    1,746,473
    
    
    
    1,555,719
    
    
    
    869,463
    
    
    
    1,020,449
    
    
    
    1,104,660Total Buckeye GP Holdings L.P.
capital
    
    
    242,334
    
    
    
    232,060
    
    
    
    238,330
    
    
    
    240,617
    
    
    
    80,442Noncontrolling interests (4)
    
    
    1,209,960
    
    
    
    1,166,774
    
    
    
    1,066,143
    
    
    
    772,525
    
    
    
    711,722
 
 (1)
    
    Substantial increases in revenue, operating income, net income and total assets for the
year ended December 31, 2007 through the year ended December 31, 2008 resulted from the
acquisitions of Lodi Gas and Farm & Home in the first quarter of 2008. See Note 4 in the
Notes to Consolidated Financial Statements for further discussion. 49




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##### Table of Contents



(2)
    
    Operating income and net income for the year ended December 31, 2009 include a non-cash
charge of $59.7 million related to an asset impairment (see Note 8 in the Notes to
Consolidated Financial Statements) and $32.1 million of expenses incurred in connection with
an organization restructuring (see Note 3 in the Notes to Consolidated Financial Statements).(3)
    
    Earnings per limited partner unit  diluted is presented only for the period since August
9, 2006, the date we became a public company.(4)
    
    For periods prior to January 1, 2009, noncontrolling interests liability has been
reclassified into partners capital on the consolidated balance sheets due to the adoption of
guidance regarding accounting and reporting standards for the noncontrolling interests in a
subsidiary. See Note 2 in the Notes to Consolidated Financial Statements for further
information. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    Overview of BGH;
    
    Overview of Buckeye;
    
    General Outlook for 2010;
    
    2009 Developments  discusses major items impacting our results in 2009;
    
    Results of Operations  discusses material year-to-year variances in the
consolidated statements of operations;
    
    Liquidity and Capital Resources  addresses available sources of liquidity and
capital resources and includes a discussion of our capital spending;
    
    Critical Accounting Policies and Estimates  presents accounting policies that are
among the most critical to the portrayal of our financial position and results of
operations;
    
    Other Items  includes information related to contractual obligations, off-balance
sheet arrangements, and other matters; and
    
    Recent Accounting Pronouncements.
   Overview of BGH
  
    
    the incentive distribution rights in Buckeye;
    
    the indirect ownership of the general partner interests in certain of Buckeyes
Operating Subsidiaries (representing an approximate 1% interest in each of such
Operating Subsidiaries);
    
    the general partner interests in Buckeye (representing 243,914 general partner units
(the GP Units), or an approximate 0.5% interest in Buckeye); and
    
    80,000 of Buckeyes LP Units.
  50




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007Incentive payments from Buckeye
    
    $
    45,739
    
    
    $
    38,895
    
    
    $
    29,978Distributions from the indirect 1% ownership in
certain of Buckeyes operating subsidiaries
    
    
    1,955
    
    
    
    1,131
    
    
    
    1,292Distributions from the ownership of 243,914 of
Buckeyes GP Units
    
    
    884
    
    
    
    835
    
    
    
    786Distributions from the ownership of 80,000 of
Buckeyes LP Units
    
    
    290
    
    
    
    274
    
    
    
    258$
    48,868
    
    
    $
    41,135
    
    
    $
    32,314
 Overview of Buckeye Partners, L.P.
    General Outlook for 2010
   51




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##### Table of Contents



2009 Developments
  Consolidated Statements of Operations
 
    
    In early 2009, we began a best practices review of our business and organization
structure to identify improved business practices, operating efficiencies and cost
savings in anticipation of changing needs in the energy markets. This review
culminated in the approval by the Board of Directors of Buckeye GP of an organizational
restructuring. The organizational restructuring included a workforce reduction of
approximately 230 employees, in excess of 20% of our workforce. The program was
initiated in the second quarter of 2009 and was substantially complete by the end of
2009. As part of the workforce reduction, we offered certain eligible employees the
option of enrolling in a voluntary early retirement program, which approximately 80
employees accepted. The remaining affected positions have been eliminated
involuntarily under our ongoing severance plan. Most terminations were effective as of
July 20, 2009. The restructuring also included the relocation of some employees
consistent with the goals of the reorganization. We have incurred $32.1 million of
expenses in connection with this organizational restructuring for the year ended
December 31, 2009. See Note 3 in the Notes to Consolidated Financial Statements for
further discussion.
    
    We recorded a non-cash charge of $59.7 million during the year ended December 31,
2009 related to an impairment of Buckeye NGL. During the second quarter of 2009, we
recorded a non-cash charge of $72.5 million. Effective January 1, 2010, we sold our
interest in Buckeye NGL for $22.0 million. The sales proceeds exceeded the previously
impaired carrying value of the NGL pipeline by $12.8 million resulting in the reversal
of $12.8 million of the previously recorded asset impairment expense in the fourth
quarter of 2009. The impairment and subsequent reversal is reflected within the
category Asset Impairment Expense on our consolidated statements of operations. See
Note 8 in the Notes to Consolidated Financial Statements for further discussion.
    
    We experienced a delay in the startup of the Kirby Hills Phase II expansion project
in our Natural Gas Storage segment, which we initially expected to occur in April 2009.
The project was ultimately placed into service in June 2009.
    
    We experienced lower Pipeline Operations product transportation volumes of 5.2% in
2009 as compared to 2008, which resulted in an approximate $19.0 million reduction in
revenues.
    
    We recorded a favorable property tax settlement of $7.2 million from the City of New
York in our Pipeline Operations segment, which is reflected within the category Total
costs and expenses in our consolidated statements of operations.
 52




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##### Table of Contents



Consolidated Balance Sheet and Capital Structure
 
    
    We completed an acquisition in 2009 of certain refined petroleum product terminals
and pipeline assets from ConocoPhillips for approximately $54.4 million that was
financed with borrowings under Buckeyes Credit Facility.
    
    We incurred capital expenditures for internal growth projects of $63.8 million.
    
    We sold $275.0 million aggregate principal amount of 5.500% Notes due 2019 for net
proceeds of $271.4 million in an underwritten public offering.
    
    We issued approximately 3.0 million of Buckeyes LP Units in 2009 for net proceeds
of approximately $104.6 million in an underwritten public offering.
    
    We amended the BES Credit Agreement to increase the borrowing capacity from $175.0
million to $250.0 million. Buckeyes Credit Facility was also amended to reduce the
borrowing capacity from $600.0 million to $580.0 million.
 Results of Operations
  
    
    Interest of noncontrolling partners in Buckeye  Our consolidated balance sheets
include a noncontrolling interests capital account that reflects the proportion of
Buckeye owned by its partners other than us. Similarly, the ownership interests in
Buckeye held by its partners other than us are reflected in our consolidated statements
of operations as income attributable to noncontrolling interest. These noncontrolling
interest accounts are not reflected in Buckeyes consolidated financial statements.
    
    Our capital structure  In addition to incorporating the assets and liabilities of
Buckeye, our consolidated balance sheets include our own indebtedness and related debt
placement costs, and the partners capital on our consolidated balance sheets represent
our partners capital as opposed to the capital reflected in Buckeyes balance sheets,
which reflects the ownership interest of all its partners, including its owners other
than us or Services Company. Consequently, our consolidated statements of operations
reflect additional interest expense, interest income and debt amortization expense that
is not reflected in Buckeyes consolidated financial statements.
    
    Inclusion of Services Company  The financial statements of Services Company, which
employs the employees who manage and operate our assets, are consolidated into our
financial statements. The consolidated financial statements of Buckeye do not include
the financial statements of Services Company.
    
    Our general and administrative expenses  We incur general and administrative
expenses that are independent from Buckeyes operations and are not reflected in
Buckeyes consolidated financial statements.
    
    Elimination of intercompany transactions  Intercompany obligations and payments
among Buckeye and its consolidated subsidiaries, us and Services Company are reflected
in Buckeyes consolidated financial statements but are eliminated in our consolidated
financial statements.
 53




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Consolidated Summary
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Revenues
    
    $
    1,770,372
    
    
    $
    1,896,652
    
    
    $
    519,347Costs and expenses
    
    
    1,566,572
    
    
    
    1,650,160
    
    
    
    323,994Operating income
    
    
    203,800
    
    
    
    246,492
    
    
    
    195,353Other expense
    
    
    (74,694
    )
    
    
    (73,857
    )
    
    
    (50,231
    )Income before earnings from equity investments
    
    
    129,106
    
    
    
    172,635
    
    
    
    145,122Earnings from equity investments
    
    
    12,531
    
    
    
    7,988
    
    
    
    7,553Net income
    
    
    141,637
    
    
    
    180,623
    
    
    
    152,675Less: net income attributable to noncontrolling interest
    
    
    (92,043
    )
    
    
    (154,146
    )
    
    
    (129,754
    )Net income attributable to Buckeye GP Holdings L.P.
    
    $
    49,594
    
    
    $
    26,477
    
    
    $
    22,921Earnings per partnership unit  diluted
    
    $
    1.75
    
    
    $
    0.94
    
    
    $
    0.81
 54




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Segment Results
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Revenues:Pipeline Operations
    
    $
    392,667
    
    
    $
    387,267
    
    
    $
    379,345Terminalling and Storage
    
    
    136,576
    
    
    
    119,155
    
    
    
    103,782Natural Gas Storage
    
    
    99,163
    
    
    
    61,791
    
    
    
    Energy Services
    
    
    1,125,013
    
    
    
    1,295,925
    
    
    
    Development and Logistics
    
    
    34,136
    
    
    
    43,498
    
    
    
    36,220Intersegment
    
    
    (17,183
    )
    
    
    (10,984
    )
    
    
    Total revenues
    
    $
    1,770,372
    
    
    $
    1,896,652
    
    
    $
    519,347Total costs and expenses: (1)Pipeline Operations
    
    $
    298,710
    
    
    $
    237,918
    
    
    $
    232,468Terminalling and Storage
    
    
    75,492
    
    
    
    67,022
    
    
    
    63,200Natural Gas Storage
    
    
    68,589
    
    
    
    29,556
    
    
    
    Energy Services
    
    
    1,111,927
    
    
    
    1,290,020
    
    
    
    Development and Logistics
    
    
    29,037
    
    
    
    36,628
    
    
    
    28,326Intersegment
    
    
    (17,183
    )
    
    
    (10,984
    )
    
    
    Total costs and expenses
    
    $
    1,566,572
    
    
    $
    1,650,160
    
    
    $
    323,994Depreciation and amortization:Pipeline Operations
    
    $
    35,533
    
    
    $
    35,188
    
    
    $
    32,996Terminalling and Storage
    
    
    7,258
    
    
    
    6,051
    
    
    
    5,610Natural Gas Storage
    
    
    5,971
    
    
    
    4,599
    
    
    
    Energy Services
    
    
    4,204
    
    
    
    3,386
    
    
    
    Development and Logistics
    
    
    1,733
    
    
    
    1,610
    
    
    
    1,630Total depreciation and amortization
    
    $
    54,699
    
    
    $
    50,834
    
    
    $
    40,236Asset impairment expense:Pipeline Operations
    
    $
    59,724
    
    
    $
    
    
    
    $
    Reorganization expense:Pipeline Operations
    
    $
    26,127
    
    
    $
    
    
    
    $
    Terminalling and Storage
    
    
    2,735
    
    
    
    
    
    
    
    Natural Gas Storage
    
    
    495
    
    
    
    
    
    
    
    Energy Services
    
    
    1,207
    
    
    
    
    
    
    
    Development and Logistics
    
    
    1,493
    
    
    
    
    
    
    
    Total reorganization expense
    
    $
    32,057
    
    
    $
    
    
    
    $
    Operating Income:Pipeline Operations
    
    $
    93,957
    
    
    $
    149,349
    
    
    $
    146,878Terminalling and Storage
    
    
    61,084
    
    
    
    52,133
    
    
    
    40,581Natural Gas Storage
    
    
    30,574
    
    
    
    32,235
    
    
    
    Energy Services
    
    
    13,086
    
    
    
    5,905
    
    
    
    Development and Logistics
    
    
    5,099
    
    
    
    6,870
    
    
    
    7,894Total operating income
    
    $
    203,800
    
    
    $
    246,492
    
    
    $
    195,353
 
 (1)
    
    Includes depreciation and amortization, asset impairment expense and reorganization expense. 55




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007Attributable to Buckeye
    
    $
    1,561,929
    
    
    $
    1,643,031
    
    
    $
    317,267Elimination of Buckeye deferred charge
    
    
    (4,698
    )
    
    
    (4,698
    )
    
    
    (4,698
    )Net effect of ESOP charges
    
    
    1,952
    
    
    
    2,517
    
    
    
    5,069Attributable to BGH
    
    
    7,389
    
    
    
    9,310
    
    
    
    6,356Total costs and expenses
    
    $
    1,566,572
    
    
    $
    1,650,160
    
    
    $
    323,994
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Payroll and payroll benefits
    
    $
    4,620
    
    
    $
    5,000
    
    
    $
    3,975Professional fees
    
    
    635
    
    
    
    3,172
    
    
    
    1,485Other
    
    
    2,134
    
    
    
    1,138
    
    
    
    896Total
    
    $
    7,389
    
    
    $
    9,310
    
    
    $
    6,356
   56




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007Pipeline Operations:(average barrels per day)Gasoline
    
    
    650,100
    
    
    
    673,500
    
    
    
    717,900Distillate
    
    
    284,700
    
    
    
    304,200
    
    
    
    320,100Jet Fuel
    
    
    336,700
    
    
    
    354,700
    
    
    
    362,700LPGs
    
    
    16,500
    
    
    
    17,500
    
    
    
    19,300NGLs
    
    
    13,900
    
    
    
    20,900
    
    
    
    20,400Other products
    
    
    8,000
    
    
    
    11,400
    
    
    
    7,000Total Pipeline Operations
    
    
    1,309,900
    
    
    
    1,382,200
    
    
    
    1,447,400Terminalling and Storage:(average barrels per day)Products throughput (1)
    
    
    444,900
    
    
    
    457,400
    
    
    
    482,300Energy Services:(in thousands of gallons)Sales volumes (2)
    
    
    655,100
    
    
    
    435,200
    
    
    
    
 
 (1)
    
    Reported quantities exclude transfer volumes, which are non-revenue generating
transfers among our various terminals. For the years ended December 31, 2008 and 2007, we
previously reported 537.7 thousand and 568.6 thousand barrels, respectively, which included
transfer volumes.(2)
    
    Our Energy Services segment business was acquired on February 8, 2008. 2009 Compared to 2008
 Consolidated
    57




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##### Table of Contents



Pipeline Operations
    58




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##### Table of Contents



Terminalling and Storage
    Natural Gas Storage
    Energy Services
  59




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##### Table of Contents



Development and Logistics
    2008 Compared to 2007
 Consolidated
   60




---



##### Table of Contents



Pipeline Operations
    61




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##### Table of Contents



Terminalling and Storage
    Natural Gas Storage
    Energy Services
   62




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##### Table of Contents



Development and Logistics
    Liquidity and Capital Resources
 BGH
    Buckeye
  63




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##### Table of Contents



Debt
 BGH
  Services Company
  Buckeyes Outstanding Debt
  64




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##### Table of Contents




    
    $300.0 million of the 4.625% Notes due 2013 (the 4.625% Notes);
    
    $275.0 million of the 5.300% Notes due 2014 (the 5.300% Notes);
    
    $125.0 million of the 5.125% Notes due 2017 (the 5.125% Notes);
    
    $300.0 million of the 6.050% Notes due 2018 (the 6.050% Notes);
    
    $275.0 million of the 5.500% Notes due 2019;
    
    $150.0 million of the 6.750% Notes due 2033 (the 6.750% Notes);
    
    $78.0 million outstanding under Buckeyes Credit Facility; and
    
    $239.8 million outstanding under the BES Credit Agreement.
   Registration Statement
  Credit Ratings
  Cash Flows from Operating, Investing and Financing Activities
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Cash provided by (used in):Operating activities
    
    $
    47,662
    
    
    $
    208,557
    
    
    $
    191,736Investing activities
    
    
    (144,203
    )
    
    
    (735,776
    )
    
    
    (108,605
    )Financing activities
    
    
    72,834
    
    
    
    494,014
    
    
    
    (8,865
    )
 65




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##### Table of Contents



Operating Activities
 2009 Compared to 2008
 
    
    We recognized $32.1 million of reorganization expenses in the 2009 period.
    
    The net change in fair values of derivatives was an increase of $20.5 million,
resulting from the decrease in value related to fixed-price sales contracts compared to
a lower level of opposite fluctuations in futures contracts purchased to hedge such
fluctuations.
    
    The net impact of working capital changes was a decrease of
$229.7 million to cash
flows from operating activities for the year ended December 31, 2009. The principal
factors affecting the working capital changes were:
 
    
    Inventories increased $177.3 million due to an increase in
inventory purchases within the Energy Services segment which are hedged with
futures contracts that expire primarily in the winter months. As a result of
energy market conditions, we significantly increased our physical inventory
purchases in 2009.
    
    Trade receivables increased $44.1 million primarily due to
increased activity from our Energy Services segment due to higher volumes in
the 2009 period.
    
    Prepaid and other current assets increased $28.9 million
primarily due to increases in prepaid services and unbilled revenue within the
Natural Gas Storage segment and an increase in receivables due to a favorable
property tax settlement, partially offset by a decrease in a receivable related
to ammonia purchases and a decrease in margin deposits on futures contracts in
our Energy Services segment.
    
    Accrued and other current liabilities increased $1.3 million
primarily due to costs related to the reorganization.
    
    Accounts payable increased $14.6 million due to activity within
the Energy Services segment.
    
    Construction and pipeline relocation receivables decreased $7.4
million primarily due to a decrease in construction activity in the 2009
period.
 2008 Compared to 2007
 
    
    Our net income increased $27.9 million for the year ended December 31, 2008 compared
with the year ended December 31 2007, primarily due to our acquisitions of Lodi Gas and
Farm & Home in 2008.
    
    The net change in fair values of derivatives was a decrease of $24.2 million,
resulting from the increase in value related to fixed-price sales contracts compared to
a lower level of opposite fluctuations in futures contracts purchased to hedge such
fluctuations. We did not utilize futures contracts to economically hedge a portion of
the fixed-price sales contracts because we had purchased inventory to fulfill a portion
of those commitments.
    
    The net impact of working capital changes was a decrease of $6.4 million to cash
flows from operations for the year ended December 31, 2008. The principal factors
affecting the working capital changes were:
 
    
    Prepaid and other current assets increased $27.8 million,
primarily due to an increase in a receivable related to ammonia purchases as
well as additional margin deposits associated with liabilities for derivative
instruments.
    
    Construction and pipeline relocation receivables increased $8.9
million due to an increase in construction activity in the latter part of 2008.
    
    Inventories increased $4.4 million due to inventory purchases
within the Energy Services segment.
    
    Accounts payable decreased $10.6 million due to activity within
the Energy Services segment since the acquisition of Farm & Home.
    
    Trade receivables decreased $36.1 million due to an increase in
collections within the Energy Services segment since the acquisition of Farm &
Home.
 66




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##### Table of Contents




    
    Accrued and other current liabilities increased $9.3 million
primarily due to increases in accrued taxes, environmental liabilities and
interest expense.
 Investing Activities
 2009 Compared to 2008
 
    
    Cash used for acquisitions and equity investments, net of cash acquired, was $58.3
million for the year ended December 31, 2009, of which $54.4 million was used for the
acquisition of refined petroleum product terminals and pipeline assets from
ConocoPhillips. We also invested an additional $3.9 million in WT LPG in 2009. Cash
used for acquisitions and equity investments, net of cash acquired, was $667.5 million
for the year ended December 31, 2008, of which $438.8 million was used for the
acquisition of Lodi Gas, $143.3 million was used for the acquisition of Farm & Home and
an aggregate of $75.6 million was used for the acquisitions of four terminals in
Albany, New York, Niles and Ferrysburg, Michigan, and Wethersfield, Connecticut and
the acquisition of the remaining 50% member interest in Wespac  San Diego that we did
not already own. We also invested an additional $9.8 million in WT LPG in 2008. See
Note 4 in the Notes to Consolidated Financial Statements for further information.
    
    Capital expenditures decreased $33.2 million for the year ended December 31, 2009
compared with the year ended December 31, 2008. See below for a discussion of capital
spending.
    
    Cash proceeds from the sale of the retail operations of Farm & Home was $52.6
million.
 2008 Compared to 2007
 
    
    Cash used for acquisitions and equity investments, net of cash acquired was $667.5
million for the year ended December 31, 2008 as discussed above. Cash used for
acquisitions and equity investments, net of cash acquired was $40.7 million for the
year ended December 31, 2007, of which $39.8 million was used for the acquisition of
terminals and related assets and $0.9 million was used for an additional investment in
WT LPG. See Note 4 in the Notes to Consolidated Financial Statements for further
information.
    
    Capital expenditures increased $52.6 million for the year ended December 31, 2008
compared with the year ended December 31, 2007. See below for a discussion of capital
spending.
    
    Cash proceeds from the sale of the retail operations of Farm & Home was $52.6
million.
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Sustaining capital expenditures
    
    $
    23,496
    
    
    $
    28,936
    
    
    $
    33,838Expansion and cost reduction
    
    
    63,813
    
    
    
    91,536
    
    
    
    34,029Total
    
    $
    87,309
    
    
    $
    120,472
    
    
    $
    67,867
  67




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##### Table of Contents



Financing Activities
 2009 Compared to 2008
 
    
    Borrowings were $317.1 million and $558.6 million and repayments were $537.4 million
and $260.3 million under Buckeyes Credit Facility in 2009 and 2008, respectively.
Repayments under the Services Company 3.60% ESOP Notes were $6.3 million in each of
2009 and 2008. There were no borrowings or repayments under the BGH Credit Agreement
in 2009 and 2008.
    
    Net borrowings under the BES Credit Agreement were $143.8 million in 2009, while net
repayments under the BES Credit Agreement (and its predecessor facility which was
replaced in May 2008) were $4.0 million in 2008.
    
    We received $271.4 million (net of debt issuance costs of $1.8 million) from
Buckeyes issuance in August 2009 of $275.0 million in aggregate principal amount of
the 5.500% Notes in an underwritten public offering. Proceeds from this offering were
used to reduce amounts outstanding under Buckeyes Credit Facility. We received $298.0
million from Buckeyes issuance in January 2008 of $300.0 million in aggregate
principal amount of the 6.050% Notes in an underwritten public offering. Proceeds from
this offering were used to partially pre-fund the Lodi Gas acquisition. In connection
with this debt offering, we settled two interest rate swaps associated with the 6.050%
Notes, which resulted in a settlement payment of $9.6 million that is being amortized
as interest expense over the ten-year term of the 6.050% Notes.
    
    We received $104.6 million in net proceeds from Buckeyes underwritten equity
offering in March 2009 from the public issuance of 3.0 million LP Units. In 2008, we
received $113.1 million in net proceeds from Buckeyes public issuance of 2.6 million
LP Units.
    
    Distributions to noncontrolling interests, consisting primarily of Buckeyes
distributions to holders of its LP Units, were $180.0 million in 2009 compared to
$159.3 million in 2008. The increase in distributions resulted primarily from
increases in Buckeyes per LP Unit distribution rate and the issuance of 3.0 million LP
Units in 2009.
    
    Cash distributions paid to our partners increased $6.4 million year-to-year due to
an increase in our quarterly cash distribution rate per Common Unit. We paid cash
distributions of $40.9 million ($1.44 per Common Unit) and $34.4 million ($1.22 per
Common Unit) during the years ended December 31, 2009 and 2008, respectively.
 2008 Compared to 2007
 
    
    Borrowings were $558.6 million and $155.0 million and repayments were $260.3 million
and $300.0 million under Buckeyes Credit Facility (and its predecessor facility) in
2008 and 2007, respectively. Repayments under the Services Company 3.60% ESOP Notes
were $6.3 million in 2008 and $6.0 million in 2007. Borrowings and repayments under
the BGH Credit Agreement were $2.5 million in 2007. There were no borrowings or
repayments under the BGH Credit Agreement in 2008.
 68




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##### Table of Contents




    
    Net repayments under the BES Credit Agreement (and its predecessor facility which
was replaced in May 2008) were $4.0 million in 2008.
    
    We received $298.1 million from Buckeyes issuance in January 2008 of $300.0 million
in aggregate principal amount of the 6.050% Notes in an underwritten public offering as
discussed above.
    
    We received $113.1 million in net proceeds from Buckeyes underwritten equity
offering in March 2008 from the public issuance of 2.6 million LP Units. In 2007, we
received $296.4 million in net proceeds from Buckeyes underwritten equity offerings in
March, August and December 2007 from the public issuance of 6.2 million LP Units.
    
    Distributions to noncontrolling interests, consisting primarily of Buckeyes
distributions to holders of its LP Units, were $159.3 million in 2008 compared to
$128.8 million in 2007. The increase in distributions resulted primarily from
increases in Buckeyes per LP Unit distribution rate and the issuance of 2.6 million LP
Units in 2008.
    
    Cash distributions paid to our partners increased $6.7 million year-to-year due to
an increase in our quarterly cash distribution rate per Common Unit. We paid cash
distributions of $34.4 million ($1.22 per Common Unit) and $27.7 million ($0.98 per
Common Unit) during the years ended December 31, 2008 and 2007, respectively.
 Derivatives
  Critical Accounting Policies
  Depreciation Methods, Estimated Useful Lives and Disposals of Property, Plant and Equipment
    69




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Reserves for Environmental Matters
   Fair Value of Derivatives
  70




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Measuring the Fair Value of Goodwill
   Measuring Recoverability of Long-Lived Assets and Equity Method Investments
  71




---



##### Table of Contents



Other Considerations
 Contractual Obligations
  Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    yearsLong-term debt (1)
    
    $
    1,510,703
    
    
    $
    6,178
    
    
    $
    79,525
    
    
    $
    575,000
    
    
    $
    850,000Interest payments (2)
    
    
    709,646
    
    
    
    78,256
    
    
    
    156,512
    
    
    
    133,139
    
    
    
    341,739Operating leases: (3)Office space and other
    
    
    18,978
    
    
    
    1,528
    
    
    
    3,075
    
    
    
    3,178
    
    
    
    11,197Land leases (4)
    
    
    311,747
    
    
    
    2,945
    
    
    
    6,341
    
    
    
    6,951
    
    
    
    295,510Purchase obligations (5)
    
    
    32,480
    
    
    
    32,480
    
    
    
    
    
    
    
    
    
    
    
    Capital expenditure obligations (6)
    
    
    1,611
    
    
    
    1,611
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    2,585,165
    
    
    $
    122,998
    
    
    $
    245,453
    
    
    $
    718,268
    
    
    $
    1,498,446
 
 (1)
    
    We have long-term payment obligations under Buckeyes Credit Facility, Buckeyes
underwritten publicly issued notes and the 3.60% ESOP Notes. Amounts shown in the table
represent the scheduled future maturities of long-term debt principal for the periods
indicated. We have assumed that the borrowings under Buckeyes Credit Facility as of
December 31, 2009 will not be repaid until the maturity date of the facility. See Note 13
in the Notes to Consolidated Financial Statements for additional information regarding our
debt obligations.(2)
    
    Interest payments include amounts due on Buckeyes underwritten publicly issued notes
and interest payments and commitment fees due on Buckeyes Credit Facility. The interest
amount calculated on
Buckeyes Credit Facility is based on the assumption that the amount outstanding and the
interest rate charged both remain at their current levels. 72




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##### Table of Contents



(3)
    
    We lease certain property, plant and equipment under noncancelable and cancelable
operating leases. Amounts shown in the table represent minimum lease payment obligations
under our operating leases with terms in excess of one year for the periods indicated.
Lease expense is charged to operating expenses on a straight line basis over the period of
expected benefit. Contingent rental payments are expensed as incurred. Total rental
expense for the years ended December 31, 2009, 2008 and 2007 was $21.2 million, $20.2
million and $11.7 million, respectively.(4)
    
    We have leases for subsurface underground gas storage rights and surface rights in
connection with our operations in the Natural Gas Storage segment. We may cancel these
leases if the storage reservoir is not used for underground storage of natural gas or the
removal or injection thereof for a continuous period of two consecutive years. Lease
expense associated with these leases is being recognized on a straight line basis over 44
years. For the year ended December 31, 2009, the Natural Gas Storage segments lease
expense was $7.4 million, including $4.5 million recorded as an increase in our deferred
lease liability. We estimate that the deferred lease liability will continue to increase
through 2032, at which time our deferred lease liability is estimated to be approximately
$64.7 million. Our deferred lease liability will then be reduced over the remaining 19
years of the lease, since the expected annual lease payments will exceed the amount of
lease expense.(5)
    
    We have long and short-term purchase obligations for products and services with
third-party suppliers. The prices that we are obligated to pay under these contracts
approximate current market prices. The table shows our commitments and estimated payment
obligations under these contracts for the periods indicated. Our estimated future payment
obligations are based on the contractual price under each contract for products and
services at December 31, 2009.(6)
    
    We have short-term payment obligations relating to capital projects we have initiated.
These commitments represent unconditional payment obligations that we have agreed to pay
vendors for services rendered or products purchased.  Employee Stock Ownership Plan
    Off-Balance Sheet Arrangements
  73




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##### Table of Contents



Related Party Transactions
  Recent Accounting Pronouncements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Market Risk  Trading Instruments
  Market Risk  Non-Trading Instruments
  Commodity Risk
    December 31,2009Assets:Fixed-price sales contracts
    
    $
    4,959Liabilities:Fixed-price sales contracts
    
    
    (3,662
    )Futures contracts for inventory and fixed-price sales contracts
    
    
    (11,003
    )Total
    
    $
    (9,706
    )
  74




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##### Table of Contents



CommodityFinancialInstrumentResulting
    
    
    PortfolioScenario
    
    Classification
    
    
    Fair ValueFair value assuming no change in underlying
commodity prices (as is)
    
    Liability
    
    $
    (9,706
    )Fair value assuming 10% increase in underlying
commodity prices
    
    Liability
    
    $
    (40,642
    )Fair value assuming 10% decrease in underlying
commodity prices
    
    Asset
    
    $
    21,223
  Interest Rate Risk
     75




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##### Table of Contents



FinancialInstrumentResulting
    
    
    PortfolioScenario
    
    Classification
    
    
    Fair ValueFair value assuming no change in underlying
interest rates (as is)
    
    Asset
    
    $
    17,204Fair value assuming 10% increase in underlying
interest rates
    
    Asset
    
    $
    26,886Fair value assuming 10% decrease in underlying
interest rates
    
    Asset
    
    $
    667
 76




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##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data
 PageManagements Report On Internal Control Over Financial Reporting
    
    
    78Reports of Independent Registered Public Accounting Firm
    
    
    79Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007
    
    
    81Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    82Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007
    
    
    83Consolidated Statements of Partners Capital for the Years Ended December 31, 2009, 2008 and 2007
    
    
    84Notes to Consolidated Financial Statements:1. Organization
    
    
    852. Summary of Significant Accounting Policies
    
    
    863. Reorganization
    
    
    954. Acquisitions and Dispositions
    
    
    955. Commitments and Contingencies
    
    
    1006. Inventories
    
    
    1027. Prepaid and Other Current Assets
    
    
    1038. Property, Plant and Equipment
    
    
    1039. Equity Investments
    
    
    10410. Goodwill and Intangible Assets
    
    
    10611. Other Non-Current Assets
    
    
    10712. Accrued and Other Current Liabilities
    
    
    10713. Debt Obligations
    
    
    10814. Other Non-Current Liabilities
    
    
    11115. Derivative Instruments, Hedging Activities and Fair Value Measurements
    
    
    11116. Pensions and Other Postretirement Benefits
    
    
    11717. Unit-Based Compensation Plans
    
    
    12218. Employee Stock Ownership Plan
    
    
    12719. Related Party Transactions
    
    
    12720. Cash Distributions
    
    
    12821. Earnings Per Partnership Unit
    
    
    12822. Business Segments
    
    
    12923. Supplemental Cash Flow Information
    
    
    13224. Quarterly Financial Data (Unaudited)
    
    
    132
 77




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   Internal Control-Integrated
Framework
  /s/ FORREST E. WYLIE
    
    /s/ KEITH E. ST.CLAIRForrest E. Wylie
    
    Keith E. St.ClairChief Executive Officer
    
    Chief Financial Officer
  78




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  Internal Control 
Integrated Framework
    Internal Control 
Integrated Framework
   
 79




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal ControlIntegrated Framework
  
 80




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per unit amounts)
 Year Ended December 31,2009
    
    
    2008
    
    
    2007Revenues:Product sales
    
    $
    1,125,653
    
    
    $
    1,304,097
    
    
    $
    10,680Transportation and other services
    
    
    644,719
    
    
    
    592,555
    
    
    
    508,667Total revenue
    
    
    1,770,372
    
    
    
    1,896,652
    
    
    
    519,347Costs and expenses:Cost of product sales and natural gas storage services
    
    
    1,103,015
    
    
    
    1,274,135
    
    
    
    10,473Operating expenses
    
    
    275,930
    
    
    
    281,965
    
    
    
    245,271Depreciation and amortization
    
    
    54,699
    
    
    
    50,834
    
    
    
    40,236Asset impairment expense
    
    
    59,724
    
    
    
    
    
    
    
    General and administrative
    
    
    41,147
    
    
    
    43,226
    
    
    
    28,014Reorganization expense
    
    
    32,057
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    1,566,572
    
    
    
    1,650,160
    
    
    
    323,994Operating income
    
    
    203,800
    
    
    
    246,492
    
    
    
    195,353Other income (expense):Investment income
    
    
    453
    
    
    
    1,553
    
    
    
    1,490Interest and debt expense
    
    
    (75,147
    )
    
    
    (75,410
    )
    
    
    (51,721
    )Total other expense
    
    
    (74,694
    )
    
    
    (73,857
    )
    
    
    (50,231
    )Income before earnings from equity investments
    
    
    129,106
    
    
    
    172,635
    
    
    
    145,122Earnings from equity investments
    
    
    12,531
    
    
    
    7,988
    
    
    
    7,553Net income
    
    
    141,637
    
    
    
    180,623
    
    
    
    152,675Less: net income attributable to noncontrolling interest
    
    
    (92,043
    )
    
    
    (154,146
    )
    
    
    (129,754
    )Net income attributable to Buckeye GP Holdings L.P.
    
    $
    49,594
    
    
    $
    26,477
    
    
    $
    22,921Earnings per partnership unit:Basic
    
    $
    1.75
    
    
    $
    0.94
    
    
    $
    0.81Diluted
    
    $
    1.75
    
    
    $
    0.94
    
    
    $
    0.81Weighted average number of common units outstanding:Basic
    
    
    28,300
    
    
    
    28,300
    
    
    
    28,142Diluted
    
    
    28,300
    
    
    
    28,300
    
    
    
    28,300
  81




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BUCKEYE GP HOLDINGS L.P.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except unit amounts)
 December 31,2009
    
    
    2008Assets:Current assets:Cash and cash equivalents
    
    $
    37,574
    
    
    $
    61,281Trade receivables, net
    
    
    124,165
    
    
    
    79,969Construction and pipeline relocation receivables
    
    
    14,095
    
    
    
    21,501Inventories
    
    
    310,214
    
    
    
    84,229Derivative assets
    
    
    4,959
    
    
    
    97,375Assets held for sale
    
    
    22,000
    
    
    
    Prepaid and other current assets
    
    
    104,251
    
    
    
    75,406Total current assets
    
    
    617,258
    
    
    
    419,761Property, plant and equipment, net
    
    
    2,238,321
    
    
    
    2,241,612Equity investments
    
    
    96,851
    
    
    
    90,110Goodwill
    
    
    432,124
    
    
    
    433,892Intangible assets, net
    
    
    45,157
    
    
    
    44,114Other non-current assets
    
    
    56,860
    
    
    
    33,608Total assets
    
    $
    3,486,571
    
    
    $
    3,263,097Liabilities and partners capital:Current liabilities:Line of credit
    
    $
    239,800
    
    
    $
    96,000Current portion of long-term debt
    
    
    6,178
    
    
    
    6,294Accounts payable
    
    
    56,723
    
    
    
    42,098Derivative liabilities
    
    
    14,665
    
    
    
    48,623Accrued and other current liabilities
    
    
    113,474
    
    
    
    116,464Total current liabilities
    
    
    430,840
    
    
    
    309,479Long-term debt
    
    
    1,500,495
    
    
    
    1,453,425Other non-current liabilities
    
    
    102,942
    
    
    
    101,359Total liabilities
    
    
    2,034,277
    
    
    
    1,864,263Commitments and contingent liabilities
    
    
    
    
    
    
    Partners capital:Buckeye GP Holdings L.P. capital:General Partner (2,830 common units outstanding
as of December 31, 2009 and 2008)
    
    
    7
    
    
    
    7Limited Partners (27,771,213 and 27,766,817 common units outstanding
as of December 31, 2009 and 2008, respectively)
    
    
    236,545
    
    
    
    226,565Management (525,957 and 530,353 units outstanding
as of December 31, 2009 and 2008, respectively)
    
    
    3,225
    
    
    
    3,037Equity gains on issuance of Buckeye Partners, L.P.
limited partner units
    
    
    2,557
    
    
    
    2,451Total Buckeye GP Holdings L.P. capital
    
    
    242,334
    
    
    
    232,060Noncontrolling interests
    
    
    1,209,960
    
    
    
    1,166,774Total partners capital
    
    
    1,452,294
    
    
    
    1,398,834Total liabilities and partners capital
    
    $
    3,486,571
    
    
    $
    3,263,097
  82




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BUCKEYE GP HOLDINGS L.P.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Year Ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    141,637
    
    
    $
    180,623
    
    
    $
    152,675Adjustments to reconcile net incometo net cash provided by operating activities:Value of ESOP shares released
    
    
    1,641
    
    
    
    2,202
    
    
    
    4,470Depreciation and amortization
    
    
    54,699
    
    
    
    50,834
    
    
    
    40,236Asset impairment expense
    
    
    59,724
    
    
    
    
    
    
    
    Gain on the sale of assets
    
    
    
    
    
    
    
    
    
    
    (828
    )Net changes in fair value of derivatives
    
    
    20,531
    
    
    
    (24,228
    )
    
    
    Non-cash deferred lease expense
    
    
    4,500
    
    
    
    4,598
    
    
    
    Earnings from equity investments of Buckeye Partners, L.P.
    
    
    (12,531
    )
    
    
    (7,988
    )
    
    
    (7,553
    )Distributions from equity investments of Buckeye Partners, L.P.
    
    
    9,660
    
    
    
    5,113
    
    
    
    7,418Amortization of other non-cash items
    
    
    8,257
    
    
    
    4,643
    
    
    
    2,197Change in assets and liabilities, net of amounts related to acquisitions:Trade receivables
    
    
    (44,112
    )
    
    
    36,060
    
    
    
    3,432Construction and pipeline relocation receivables
    
    
    7,406
    
    
    
    (8,930
    )
    
    
    (382
    )Inventories
    
    
    (177,309
    )
    
    
    (4,362
    )
    
    
    (863
    )Prepaid and other current assets
    
    
    (28,937
    )
    
    
    (27,823
    )
    
    
    1,467Accounts payable
    
    
    14,569
    
    
    
    (10,647
    )
    
    
    (6,282
    )Accrued and other current liabilities
    
    
    (1,296
    )
    
    
    9,336
    
    
    
    733Other non-current assets
    
    
    (9,916
    )
    
    
    9,520
    
    
    
    1,999Other non-current liabilities
    
    
    (861
    )
    
    
    (10,394
    )
    
    
    (6,983
    )Total adjustments from operating activities
    
    
    (93,975
    )
    
    
    27,934
    
    
    
    39,061Net cash provided by operating activities
    
    
    47,662
    
    
    
    208,557
    
    
    
    191,736Cash flows from investing activities:Capital expenditures
    
    
    (87,309
    )
    
    
    (120,472
    )
    
    
    (67,867
    )Acquisitions and equity investments, net of cash acquired
    
    
    (58,313
    )
    
    
    (667,523
    )
    
    
    (40,726
    )Net proceeds (expenditures) for disposal of property, plant and equipment
    
    
    1,419
    
    
    
    (365
    )
    
    
    (12
    )Proceeds from the sale of Farm & Home retail operations
    
    
    
    
    
    
    52,584
    
    
    
    Net cash used in investing activities
    
    
    (144,203
    )
    
    
    (735,776
    )
    
    
    (108,605
    )Cash flows from financing activities:Net proceeds from issuance of Buckeye Partners, L.P. limited partner units
    
    
    104,632
    
    
    
    113,111
    
    
    
    296,361Proceeds from exercise of Buckeye Partners, L.P. unit options
    
    
    3,204
    
    
    
    316
    
    
    
    2,497Issuance of long-term debt
    
    
    273,210
    
    
    
    298,050
    
    
    
    Repayment of long term-debt
    
    
    (6,294
    )
    
    
    (6,289
    )
    
    
    (6,037
    )Borrowings under credit facilities
    
    
    317,120
    
    
    
    558,554
    
    
    
    157,500Repayments under credit facilities
    
    
    (537,387
    )
    
    
    (260,288
    )
    
    
    (302,499
    )Net borrowings (repayments) under BES credit agreement
    
    
    143,800
    
    
    
    (4,000
    )
    
    
    Debt issuance costs
    
    
    (4,691
    )
    
    
    (2,111
    )
    
    
    (178
    )Distributions paid to noncontrolling partners of Buckeye Partners, L.P.
    
    
    (180,008
    )
    
    
    (159,306
    )
    
    
    (128,775
    )Settlement payment of interest rate swaps
    
    
    
    
    
    
    (9,638
    )
    
    
    Distributions paid to partners
    
    
    (40,752
    )
    
    
    (34,385
    )
    
    
    (27,734
    )Net cash provided by (used in) financing activities
    
    
    72,834
    
    
    
    494,014
    
    
    
    (8,865
    )Net increase (decrease) in cash and cash equivalents
    
    
    (23,707
    )
    
    
    (33,205
    )
    
    
    74,266Cash and cash equivalents  Beginning of year
    
    
    61,281
    
    
    
    94,486
    
    
    
    20,220Cash and cash equivalents  End of year
    
    $
    37,574
    
    
    $
    61,281
    
    
    $
    94,486
  83




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
 
 CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL
 (In thousands)
 Buckeye GP Holdings L.P. UnitholdersEquity GainsGeneral
    
    
    Limited
    
    
    
    
    
    
    on IssuancePartner
    
    
    Partner
    
    
    
    
    
    
    of BuckeyesCommon
    
    
    Common
    
    
    Management
    
    
    Limited
    
    
    NoncontrollingUnits
    
    
    Units
    
    
    Units
    
    
    Partner Units
    
    
    Interests
    
    
    TotalPartners capital  January 1, 2007
    
    $
    7
    
    
    $
    232,202
    
    
    $
    6,926
    
    
    $
    1,482
    
    
    $
    772,525
    
    
    $
    1,013,142Net income*
    
    
    
    
    
    
    22,921
    
    
    
    
    
    
    
    
    
    
    
    129,754
    
    
    
    152,675Distributions paid to partners
    
    
    
    
    
    
    (27,734
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,734
    )Recognition of value of Management Units
    
    
    
    
    
    
    
    
    
    
    1,179
    
    
    
    
    
    
    
    
    
    
    
    1,179Conversion of Management Units
    
    
    
    
    
    
    4,949
    
    
    
    (4,949
    )
    
    
    
    
    
    
    
    
    
    
    Recognition of unit-based compensation charges
    
    
    
    
    
    
    590
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    590Equity gains on issuance of Buckeye LP Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    757
    
    
    
    (757
    )
    
    
    Net proceeds from issuance of 6.2 million of Buckeyes limited partner units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    296,361
    
    
    
    296,361Amortization of Buckeyes limited partner unit options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    378
    
    
    
    378Exercise of limited partner unit options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,497
    
    
    
    2,497Services Companys non-cash ESOP distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,015
    )
    
    
    (5,015
    )Distributions paid to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128,775
    )
    
    
    (128,775
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (825
    )
    
    
    (825
    )Partners capital  December 31, 2007
    
    
    7
    
    
    
    232,928
    
    
    
    3,156
    
    
    
    2,239
    
    
    
    1,066,143
    
    
    
    1,304,473Net income*
    
    
    
    
    
    
    25,981
    
    
    
    496
    
    
    
    
    
    
    
    154,146
    
    
    
    180,623Distributions paid to partners
    
    
    
    
    
    
    (33,741
    )
    
    
    (644
    )
    
    
    
    
    
    
    
    
    
    
    (34,385
    )Recognition of unit-based compensation charges
    
    
    
    
    
    
    1,397
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    1,426Equity gains on issuance of Buckeye LP Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212
    
    
    
    (212
    )
    
    
    Net proceeds from issuance of 2.6 million of Buckeyes limited partner units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,111
    
    
    
    113,111Amortization of Buckeyes limited partner unit options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    486
    
    
    
    486Exercise of limited partner unit options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    316
    
    
    
    316Services Companys non-cash ESOP distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,685
    )
    
    
    (5,685
    )Acquired noncontrolling interests not previously owned
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,537
    )
    
    
    (1,537
    )Distributions paid to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (159,306
    )
    
    
    (159,306
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (688
    )
    
    
    (688
    )Partners capital  December 31, 2008
    
    
    7
    
    
    
    226,565
    
    
    
    3,037
    
    
    
    2,451
    
    
    
    1,166,774
    
    
    
    1,398,834Net income*
    
    
    
    
    
    
    48,668
    
    
    
    926
    
    
    
    
    
    
    
    92,043
    
    
    
    141,637Distributions paid to partners
    
    
    
    
    
    
    (39,990
    )
    
    
    (762
    )
    
    
    
    
    
    
    
    
    
    
    (40,752
    )Recognition of unit-based compensation charges
    
    
    
    
    
    
    1,302
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    1,326Equity gains on issuance of Buckeye LP Units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    (106
    )
    
    
    Net proceeds from issuance of 3.0 million of Buckeyes limited partner units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,632
    
    
    
    104,632Amortization of Buckeyes limited partner unit options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,079
    
    
    
    3,079Exercise of limited partner unit options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,204
    
    
    
    3,204Services Companys non-cash ESOP distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,073
    )
    
    
    (6,073
    )Distributions paid to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (180,008
    )
    
    
    (180,008
    )Change in value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,722
    
    
    
    17,722Amortization of interest rate swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    961
    
    
    
    961Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,732
    
    
    
    7,732Partners capital  December 31, 2009
    
    $
    7
    
    
    $
    236,545
    
    
    $
    3,225
    
    
    $
    2,557
    
    
    $
    1,209,960
    
    
    $
    1,452,294
 
 *
    
    Comprehensive income equals net income.  84




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Except for per unit amounts, or as otherwise noted within the context of each footnote
disclosure, the dollar amounts presented in the tabular data within these footnote disclosures are
stated in thousands.
 
 1. ORGANIZATION
 we us our BGH Buckeye
    85




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Basis of Presentation and Principles of Consolidation
  Business Segments
  Asset Retirement Obligations
    Capitalization of Interest
  86




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Cash and Cash Equivalents
   Construction and Pipeline Relocation Receivables
  Contingencies
    Cost of Product Sales and Natural Gas Storage Services
  87




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Debt Issuance Costs
  Earnings per Partnership Unit
  Environmental Expenditures
   Equity Investments
  88




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Estimates
  Fair Value
  Financial Instruments
    89




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Goodwill
  Income Taxes
    Intangible Assets
  Inventories
   90




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Long-Lived Assets
  Noncontrolling Interests
  Pensions
  Postretirement Benefits Other Than Pensions
  Property, Plant and Equipment
  91




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Life in yearsRight of way
    
    44-50Line pipe and fittings
    
    44-50Buildings
    
    50Wells
    
    44Pumping and compression equipment
    
    44-50Oil tanks
    
    50Office furniture and equipment
    
    18Vehicles and other work equipment
    
    11Servers and software
    
    5
 Recent Accounting Developments
  Consolidation of Variable Interest Entities (VIEs)
 Fair Value Measurements
  92




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Reclassifications
  Regulatory Reporting
  Revenue Recognition
  
    
    Pipeline Operations segment:
 o
    
    Revenue from the transportation of refined petroleum products is
recognized as products are delivered.
 
    
    Terminalling and Storage segment:
 o
    
    Revenues from terminalling, storage and rental operations are
recognized as the services are performed.
 
    
    Natural Gas Storage segment:
 o
    
    Revenue from natural gas storage, which consists of demand charges, or
lease revenues, for the reservation of storage space under firm storage agreements,
is recognized over the term of the related storage agreement. The demand charge
entitles the customer to a fixed amount of storage space and certain injection and
withdrawal rights. Title to the stored gas remains with the customer.o
    
    Revenues from hub services, which consist of a variety of other gas
storage services under interruptible storage agreements, are recognized ratably
over the term of the agreement. These services principally include park and loan
transactions. Parks occur when gas from a customer is injected and stored for a
specified period. The customer then has the obligation to withdraw its stored gas
at a future date. Title to the gas remains with the customer. Loans occur when gas
is delivered to a customer in a specified period. The customer then has the
obligation to redeliver gas at a future date.
 
    
    Energy Services segment:
 o
    
    Revenue from the sale of refined petroleum products, which are sold on
a wholesale basis, is recognized when such products are delivered to the customer
purchasing the products.
 
    
    Development and Logistics segment:
 o
    
    Revenues from contract operation and construction services of
facilities and pipelines not directly owned by us are recognized as the services
are performed. Contract and construction services revenue typically includes costs
to be reimbursed by the customer plus an operator fee.
 93




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Trade Receivables and Concentration of Credit Risk
      Unit-Based Compensation
  94




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 3. REORGANIZATION
     Pipeline Operations
    
    $
    26,127Terminalling and Storage
    
    
    2,735Natural Gas Storage
    
    
    495Energy Services
    
    
    1,207Development and Logistics
    
    
    1,493Total reorganization expenses
    
    $
    32,057
 
 4. ACQUISITIONS AND DISPOSITIONS
 Business Combinations
  Refined Petroleum Products Terminals and Pipeline Assets
  95




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Inventory
    
    $
    7,287Property, plant and equipment
    
    
    44,400Intangible assets
    
    
    4,580Environmental and other liabilities
    
    
    (1,834
    )Allocated purchase price
    
    $
    54,433
 Lodi Gas
  Contractual purchase price
    
    $
    440,000Working capital adjustments and fees
    
    
    2,367Total purchase price
    
    $
    442,367
  Current assets
    
    $
    8,240Property, plant and equipment
    
    
    274,880Goodwill
    
    
    169,560Current liabilities
    
    
    (9,096
    )Other liabilities
    
    
    (1,217
    )Allocated purchase price
    
    $
    442,367
 96




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Farm & Home
  Current assets
    
    $
    79,144Inventory
    
    
    93,332Property, plant and equipment
    
    
    33,880Goodwill
    
    
    1,132Customer relationships
    
    
    38,300Other assets
    
    
    3,688Assets held for sale, net of liability of $0.7 million
    
    
    51,645Debt
    
    
    (100,000
    )Current liabilities
    
    
    (53,208
    )Other liabilities
    
    
    (1,740
    )Allocated purchase price
    
    $
    146,173
  97




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Albany Terminal
  Current assets
    
    $
    78Property, plant and equipment
    
    
    25,172Goodwill
    
    
    26,829Other assets
    
    
    1,920Other liabilities
    
    
    (7,144
    )Allocated purchase price
    
    $
    46,855
 Unaudited Pro forma Financial Results
   98




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Year Ended December 31,2008
    
    
    2007Revenues:As reported
    
    $
    1,896,652
    
    
    $
    519,347Pro forma adjustments
    
    
    180,422
    
    
    
    1,155,655Pro forma revenue
    
    $
    2,077,074
    
    
    $
    1,675,002Net income:As reported
    
    $
    180,623
    
    
    $
    152,675Pro forma adjustments
    
    
    768
    
    
    
    6,308Pro forma net income
    
    $
    181,391
    
    
    $
    158,983Pro forma earnings per partnership unit:Basic
    
    $
    0.96
    
    
    $
    1.04Diluted
    
    $
    0.96
    
    
    $
    1.03Pro forma weighted average number of limited
partner units outstanding:Basic
    
    
    28,300
    
    
    
    28,142Diluted
    
    
    28,300
    
    
    
    28,300
 Asset Acquisitions
   Land
    
    $
    592Buildings
    
    
    1,621Machinery, equipment, and office furnishings
    
    
    11,714Allocated purchase price
    
    $
    13,927
   99




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Land
    
    $
    8,663Buildings
    
    
    3,481Machinery, equipment, and office furnishings
    
    
    10,024Allocated purchase price
    
    $
    22,168
   Land
    
    $
    3,400Buildings
    
    
    1,100Machinery, equipment, and office furnishings
    
    
    10,660Allocated purchase price
    
    $
    15,160
 
 5. COMMITMENTS AND CONTINGENCIES
 Claims and Proceedings
   Madigan v. Buckeye
Partners, L.P.
 100




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Environmental Contingencies
 .
 Ammonia Contract Contingencies
   Leases Where We are Lessee
  Office space
    
    
    Landand other (1)
    
    
    Leases (2)
    
    
    Total2010
    
    $
    1,528
    
    
    $
    2,945
    
    
    $
    4,4732011
    
    
    1,536
    
    
    
    3,059
    
    
    
    4,5952012
    
    
    1,539
    
    
    
    3,282
    
    
    
    4,8212013
    
    
    1,563
    
    
    
    3,409
    
    
    
    4,9722014
    
    
    1,615
    
    
    
    3,542
    
    
    
    5,157Thereafter
    
    
    11,197
    
    
    
    295,510
    
    
    
    306,707Total
    
    $
    18,978
    
    
    $
    311,747
    
    
    $
    330,725
 
 (1)
    
    We lease certain other land and space in office buildings. 101




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (2)
    
    We have leases for subsurface underground gas storage rights and surface rights in
connection with our operations in the Natural Gas Storage segment. We may cancel these
leases if the storage reservoir is not used for underground storage of natural gas or the
removal or injection thereof for a continuous period of two consecutive years. Lease
expense associated with these leases is being recognized on a straight-line basis over 44
years. For the years ended December 31, 2009 and 2008, the Natural Gas Storage segments
lease expense was approximately $7.4 million and $7.1 million, respectively. At December
31, 2009 and 2008, $4.5 million and $4.6 million, respectively, was recorded as an increase
in our deferred lease liability. We estimate that the deferred lease liability will
continue to increase through 2032, at which time our deferred lease liability is estimated
to be approximately $64.7 million. Our deferred lease liability will then be reduced over
the remaining 19 years of the lease, since the expected annual lease payments will exceed
the amount of lease expense.
 Leases  Where We are Lessor
  Years EndingDecember 31,2010
    
    $
    8,8392011
    
    
    8,8392012
    
    
    8,8392013
    
    
    8,8392014
    
    
    6,819Thereafter
    
    
    48,446Total
    
    $
    90,621
 
 6. INVENTORIES
  December 31,2009
    
    
    2008Refined petroleum products (1)
    
    $
    299,473
    
    
    $
    69,568Materials and supplies
    
    
    10,741
    
    
    
    14,661Total inventories
    
    $
    310,214
    
    
    $
    84,229
 
 (1)
    
    Ending inventory was 141.7 million and 47.7 million gallons of refined petroleum
products at December 31, 2009 and 2008, respectively.  102




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 7. PREPAID AND OTHER CURRENT ASSETS
  December 31,2009
    
    
    2008Prepaid insurance
    
    $
    7,088
    
    
    $
    7,889Insurance receivables
    
    
    13,544
    
    
    
    5,101Ammonia receivable
    
    
    7,429
    
    
    
    12,058Margin deposits
    
    
    21,037
    
    
    
    32,345Prepaid services
    
    
    21,571
    
    
    
    Unbilled revenue
    
    
    13,201
    
    
    
    1,074Tax receivable
    
    
    7,162
    
    
    
    Other
    
    
    13,219
    
    
    
    16,939Total prepaid and other current assets
    
    $
    104,251
    
    
    $
    75,406
 
 8. PROPERTY, PLANT AND EQUIPMENT
  December 31,2009
    
    
    2008Land
    
    $
    64,712
    
    
    $
    62,139Rights-of-way
    
    
    97,309
    
    
    
    97,724Pad gas
    
    
    29,346
    
    
    
    29,346Buildings and leasehold improvements
    
    
    103,535
    
    
    
    92,668Machinery, equipment and office furnishings
    
    
    2,130,552
    
    
    
    2,009,591Construction in progress
    
    
    78,363
    
    
    
    173,691Total property, plant and equipment
    
    
    2,503,817
    
    
    
    2,465,159Less: Accumulated depreciation
    
    
    (265,496
    )
    
    
    (223,547
    )Total property, plant and equipment, net
    
    $
    2,238,321
    
    
    $
    2,241,612
  Impairment of Long-Lived Assets and Assets Held for Sale
   103




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Inventories
    
    $
    629Property, plant and equipment, net
    
    
    21,371Assets held for sale
    
    $
    22,000
  AROs
  ARO liability balance, January 1, 2008
    
    $
    Liabilities assumed with Lodi Gas acquisition
    
    
    665Additional ARO for Kirby Hills Phase II
    
    
    194Accretion expense
    
    
    60ARO liability balance, December 31, 2008
    
    
    919Accretion expense
    
    
    101ARO liability balance, December 31, 2009 (1)
    
    $
    1,020
 
 (1)
    
    Amount is included in other non-current liabilities. 
 9. EQUITY INVESTMENTS
  December 31,Ownership
    
    
    2009
    
    
    2008Muskegon Pipeline LLC
    
    
    40.0
    %
    
    $
    15,273
    
    
    $
    14,967Transport4, LLC
    
    
    25.0
    %
    
    
    379
    
    
    
    332West Shore Pipe Line Company
    
    
    24.9
    %
    
    
    30,320
    
    
    
    30,340West Texas LPG Pipeline Limited Partnership
    
    
    20.0
    %
    
    
    50,879
    
    
    
    44,471Total equity investments
    
    
    
    
    
    $
    96,851
    
    
    $
    90,110
  104




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Muskegon Pipeline LLC
    
    $
    1,437
    
    
    $
    1,367
    
    
    $
    1,385Transport4, LLC
    
    
    147
    
    
    
    70
    
    
    
    43West Shore Pipe Line Company
    
    
    4,809
    
    
    
    3,133
    
    
    
    3,511WT LPG
    
    
    6,138
    
    
    
    3,418
    
    
    
    2,614Total earnings from equity investments
    
    $
    12,531
    
    
    $
    7,988
    
    
    $
    7,553
  December 31,2009
    
    
    2008BALANCE SHEET DATA:Current assets
    
    $
    43,154
    
    
    $
    65,919Noncurrent assets
    
    
    204,843
    
    
    
    195,478Total assets
    
    $
    247,997
    
    
    $
    261,397Current liabilities
    
    $
    32,592
    
    
    $
    57,554Other liabilities
    
    
    10,922
    
    
    
    11,742Combined equity
    
    
    204,483
    
    
    
    192,101Total liabilities and combined equity
    
    $
    247,997
    
    
    $
    261,397
 Year Ended December 31,2009
    
    
    2008
    
    
    2007INCOME STATEMENT DATA:Revenues
    
    $
    134,786
    
    
    $
    127,885
    
    
    $
    122,622Costs and expenses
    
    
    67,694
    
    
    
    86,273
    
    
    
    80,977Non-operating expense
    
    
    12,914
    
    
    
    9,036
    
    
    
    10,559Net income
    
    
    54,178
    
    
    
    32,576
    
    
    
    31,086
 105




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 10. GOODWILL AND INTANGIBLE ASSETS
 Goodwill
  December 31,2009
    
    
    2008Pipeline Operations:Purchase of general partner interests in 2004
    
    $
    198,632
    
    
    $
    198,632Terminalling and Storage:Acquisition of six terminals in June 2000
    
    
    11,355
    
    
    
    11,355Purchase of general partner interests in 2004
    
    
    11,434
    
    
    
    11,434Acquisition of Albany Terminal in 2008 (1)
    
    
    26,829
    
    
    
    28,597Subtotal
    
    
    49,618
    
    
    
    51,386Natural Gas Storage:Acquisition of Lodi Gas in 2008
    
    
    169,560
    
    
    
    169,560Energy Services:Acquisition of Farm & Home in 2008
    
    
    1,132
    
    
    
    1,132Other Operations:Purchase of general partner interests in 2004
    
    
    13,182
    
    
    
    13,182Total goodwill
    
    $
    432,124
    
    
    $
    433,892
 
 (1)
    
    Goodwill decreased by $1.8 million as of December 31, 2009 from December 31, 2008 due
to the finalization of the purchase price allocation of the Albany Terminal; the difference
was allocated to property, plant and equipment. Intangible Assets
  106




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31,2009
    
    
    2008Customer relationships
    
    $
    38,300
    
    
    $
    38,300Accumulated amortization
    
    
    (5,631
    )
    
    
    (2,662
    )Net carrying amount
    
    
    32,669
    
    
    
    35,638Customer contracts
    
    
    16,380
    
    
    
    11,800Accumulated amortization
    
    
    (3,892
    )
    
    
    (3,324
    )Net carrying amount
    
    
    12,488
    
    
    
    8,476Total intangible assets
    
    $
    45,157
    
    
    $
    44,114
  
 11. OTHER NON-CURRENT ASSETS
  December 31,2009
    
    
    2008Prepaid services
    
    $
    11,640
    
    
    $
    Long-term derivative assets
    
    
    17,204
    
    
    
    6,273Debt issuance costs
    
    
    11,058
    
    
    
    8,944Insurance receivables
    
    
    7,265
    
    
    
    6,518Other
    
    
    9,693
    
    
    
    11,873Total other non-current assets
    
    $
    56,860
    
    
    $
    33,608
 
 12. ACCRUED AND OTHER CURRENT LIABILITIES
  December 31,2009
    
    
    2008Taxes  other than income
    
    $
    15,487
    
    
    $
    14,092Accrued employee benefit liability
    
    
    3,287
    
    
    
    2,297Environmental liabilities
    
    
    10,799
    
    
    
    12,337Interest payable
    
    
    30,613
    
    
    
    25,551Payable for ammonia purchase
    
    
    7,015
    
    
    
    9,373Unearned revenue
    
    
    6,829
    
    
    
    12,186Compensation and vacation
    
    
    11,385
    
    
    
    15,642Accrued capital expenditures
    
    
    1,611
    
    
    
    4,902Reorganization
    
    
    2,133
    
    
    
    Deferred consideration
    
    
    1,675
    
    
    
    Other
    
    
    22,640
    
    
    
    20,084Total accrued and other current liabilities
    
    $
    113,474
    
    
    $
    116,464
 107




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 13. DEBT OBLIGATIONS
  December 31,2009
    
    
    2008BGH:BGH Credit Agreement
    
    $
    
    
    
    $
    Services Company:3.60% ESOP Notes due March 28, 2011
    
    
    7,790
    
    
    
    14,255Retirement premium
    
    
    (87
    )
    
    
    (258
    )Buckeye:4.625% Notes due July 15, 2013 (1)
    
    
    300,000
    
    
    
    300,0005.300% Notes due October 15, 2014 (1)
    
    
    275,000
    
    
    
    275,0005.125% Notes due July 1, 2017 (1)
    
    
    125,000
    
    
    
    125,0006.050% Notes due January 15, 2018 (1)
    
    
    300,000
    
    
    
    300,0005.500% Notes due August 15, 2019 (1)
    
    
    275,000
    
    
    
    6.750% Notes due August 15, 2033 (1)
    
    
    150,000
    
    
    
    150,000Borrowings under the Credit Facility
    
    
    78,000
    
    
    
    298,267BES Credit Agreement
    
    
    239,800
    
    
    
    96,000Total debt
    
    $
    1,750,503
    
    
    $
    1,558,264Other, including unamortized discounts and fair value hedges
    
    
    (4,030
    )
    
    
    (2,545
    )Subtotal debt
    
    
    1,746,473
    
    
    
    1,555,719Less: current portion of long-term debt
    
    
    (245,978
    )
    
    
    (102,294
    )Total long-term debt
    
    $
    1,500,495
    
    
    $
    1,453,425
 
 (1)
    
    We make semi-annual interest payments on these notes based on the rates noted above
with the principal balances outstanding to be paid on or before the due dates as shown
above.  Years EndingDecember 31,2010
    
    $
    245,9782011
    
    
    1,5252012
    
    
    78,0002013
    
    
    300,0002014
    
    
    275,000Thereafter
    
    
    850,000Total
    
    $
    1,750,503
  108




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   BGH
    Services Company ESOP Notes
  109




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Credit Facility
      BES Credit Agreement
  110




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Borrowings
    
    Minimum
    
    Minimum
    
    Maximumoutstanding on
    
    Consolidated Tangible
    
    Consolidated Net
    
    ConsolidatedBES Credit Agreement
    
    Net Worth
    
    Working Capital
    
    Leverage Ratio$150
    
    $40
    
    $30
    
    7.0 to 1.0Above $150 up to $200
    
    $50
    
    $40
    
    7.0 to 1.0Above $200 up to $250
    
    $60
    
    $50
    
    7.0 to 1.0
   
 14. OTHER NON-CURRENT LIABILITIES
  December 31,2009
    
    
    2008Accrued employee benefit liabilities (see Note 16)
    
    $
    45,837
    
    
    $
    49,281Accrued environmental liabilities
    
    
    19,053
    
    
    
    14,684Deferred consideration
    
    
    18,425
    
    
    
    20,100Deferred rent
    
    
    9,158
    
    
    
    4,658Other
    
    
    10,469
    
    
    
    12,636Total other non-current liabilities
    
    $
    102,942
    
    
    $
    101,359
 
 15. DERIVATIVE INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS
  111




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Interest Rate Derivatives
     112




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Commodity Derivatives
     Volume(1)
    
    
    AccountingDerivative Purpose
    
    Current
    
    
    Long-Term(2)
    
    
    TreatmentDerivatives NOT designated as hedging instruments:Fixed-price sales contracts
    
    
    33,428
    
    
    
    
    
    
    Mark-to-marketFutures contracts for fixed-price sales contracts
    
    
    21,000
    
    
    
    
    
    
    Mark-to-marketDerivatives designated as hedging instruments:Futures contracts for inventory
    
    
    132,090
    
    
    
    
    
    
    Fair Value HedgeFutures contract for natural gas (MMBtu)
    
    
    360,000
    
    
    
    210,000
    
    
    Cash Flow Hedge
 
 (1)
    
    Volume represents net notional position.(2)
    
    The maximum term for derivatives included in the long-term column is July 2011. 113




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  December 31, 2009DerivativeDerivatives NOT designated as
    
    Assets
    
    
    (Liabilities)
    
    
    Net Carryinghedging instruments:
    
    Fair value
    
    
    Fair value
    
    
    ValueFixed-price sales contracts
    
    $
    4,959
    
    
    $
    (3,662
    )
    
    $
    1,297Futures contracts for fixed-price sales contracts
    
    
    7,594
    
    
    
    (384
    )
    
    
    7,210Derivatives designated as hedging
instruments:Futures contracts for inventory
    
    $
    1,992
    
    
    $
    (20,517
    )
    
    $
    (18,525
    )Futures contract for natural gas
    
    
    312
    
    
    
    
    
    
    
    312Interest rate contracts
    
    
    17,204
    
    
    
    
    
    
    
    17,204Total
    
    
    
    
    
    
    
    
    
    $
    7,498
 December 31,Balance Sheet Locations:
    
    2009Derivative assets
    
    $
    4,959Other non-current assets
    
    
    17,204Derivative liabilities
    
    
    (14,665
    )Total
    
    $
    7,498
  114




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Gain (Loss)Recognized inDerivatives NOT designated as
    
    
    
    Income onhedging instruments
    
    Location
    
    DerivativesFixed-price sales contracts
    
    Product sales
    
    $
    (6,881
    )Futures contracts for fixed-price sales contracts
    
    Cost of product sales and natural gas storage services
    
    
    15,653Derivatives designated ashedging instruments
    
    LocationFutures contracts for inventory
    
    Cost of product sales and natural gas storage services
    
    $
    (47,012
    )Futures contract for natural gas
    
    Cost of product sales and natural gas storage services
    
    
    (3
    )Interest rate contracts
    
    Interest and debt expense
    
    
    (224
    )
 Change inValueRecognizedDerivatives designated as
    
    Gain (Loss) Reclassified from AOCI to Income
    
    
    in OCI onhedging instruments
    
    Location
    
    Amount
    
    
    DerivativesFutures contract for natural gas
    
    Cost of product sales and natural gas storage services
    
    $
    (409
    )
    
    $
    296Interest rate contracts
    
    Interest and debt expense
    
    
    (218
    )
    
    
    17,204
 Fair Value Measurements
   
    
    Level 1 inputs are based on quoted prices, which are available in active markets for
identical assets or liabilities as of the reporting date. Active markets are defined
as those in which transactions for identical assets or liabilities occur with
sufficient frequency and volume to provide pricing information on an ongoing basis.
 115




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
    
    Level 2 inputs are based on pricing inputs other than quoted prices in active
markets and are either directly or indirectly observable as of the measurement date.
Level 2 fair values include instruments that are valued using financial models or other
appropriate valuation methodologies and include the following:
 
    
    Quoted prices in active markets for similar assets or liabilities.
    
    Quoted prices in markets that are not active for identical or similar assets or
liabilities.
    
    Inputs other than quoted prices that are observable for the asset or liability.
    
    Inputs that are derived primarily from or corroborated by observable market data
by correlation or other means.
 
    
    Level 3 inputs are based on unobservable inputs for the asset or liability.
Unobservable inputs are used to measure fair value to the extent that observable inputs
are not available, thereby allowing for situations in which there is little, if any,
market activity for the asset or liability at the measurement date. Unobservable
inputs reflect the reporting entitys own ideas about the assumptions that market
participants would use in pricing an asset or liability (including assumptions about
risk). Unobservable inputs are based on the best information available in the
circumstances, which might include the reporting entitys internally developed data.
The reporting entity must not ignore information about market participant assumptions
that is reasonably available without undue cost and effort. Level 3 inputs are
typically used in connection with internally developed valuation methodologies where
management makes its best estimate of an instruments fair value.
 Recurring
  December 31, 2009
    
    
    December 31, 2008Significant
    
    
    
    
    
    
    SignificantQuoted Prices
    
    
    Other
    
    
    Quoted Prices
    
    
    Otherin Active
    
    
    Observable
    
    
    in Active
    
    
    ObservableMarkets
    
    
    Inputs
    
    
    Markets
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 1)
    
    
    (Level 2)Financial assets:Commodity derivatives
    
    $
    
    
    
    $
    4,959
    
    
    $
    25,225
    
    
    $
    79,322Asset held in trust
    
    
    1,793
    
    
    
    
    
    
    
    3,648
    
    
    
    Interest rate derivative
    
    
    
    
    
    
    17,204
    
    
    
    
    
    
    
    Financial liabilities:Interest rate derivative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (333
    )Commodity derivatives
    
    
    (11,003
    )
    
    
    (3,662
    )
    
    
    (50,806
    )
    
    
    (1,045
    )Total
    
    $
    (9,210
    )
    
    $
    18,501
    
    
    $
    (21,933
    )
    
    $
    77,944
  116




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Non-Recurring
  December 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    LossesAssets held for sale (1)
    
    $
    22,000
    
    
    $
    22,000
    
    
    $
    
    
    
    $
    
    
    
    $
    59,724
 
 (1)
    
    Represents inventory and property, plant and equipment included in assets held for sale
(see Note 8).  
 16. PENSIONS AND OTHER POSTRETIREMENT BENEFITS
 RIGP and Retiree Medical Plan
     117




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   RIGP
    
    
    Retiree Medical PlanYear Ended December 31,
    
    
    Year Ended December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Change in benefit obligation:Benefit obligation at beginning of year
    
    $
    27,134
    
    
    $
    20,240
    
    
    $
    34,877
    
    
    $
    36,663Service cost
    
    
    495
    
    
    
    723
    
    
    
    339
    
    
    
    382Interest cost
    
    
    1,182
    
    
    
    1,018
    
    
    
    1,941
    
    
    
    1,947Plan participants contributions
    
    
    
    
    
    
    
    
    
    
    295
    
    
    
    Part D reimbursement
    
    
    
    
    
    
    
    
    
    
    245
    
    
    
    Actuarial loss (gain)
    
    
    4,399
    
    
    
    8,299
    
    
    
    (964
    )
    
    
    (2,669
    )Curtailments
    
    
    
    
    
    
    
    
    
    
    1,091
    
    
    
    Settlements
    
    
    (13,977
    )
    
    
    (2,990
    )
    
    
    
    
    
    
    Benefit payments
    
    
    (130
    )
    
    
    (156
    )
    
    
    (2,375
    )
    
    
    (1,446
    )Benefit obligation at end of year
    
    $
    19,103
    
    
    $
    27,134
    
    
    $
    35,449
    
    
    $
    34,877Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    10,433
    
    
    $
    12,915
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    (358
    )
    
    
    (189
    )
    
    
    
    
    
    
    Plan participants contributions
    
    
    
    
    
    
    
    
    
    
    295
    
    
    
    Part D reimbursement
    
    
    
    
    
    
    
    
    
    
    245
    
    
    
    Employer contribution
    
    
    9,459
    
    
    
    853
    
    
    
    1,835
    
    
    
    1,446Settlements
    
    
    (13,977
    )
    
    
    (2,990
    )
    
    
    
    
    
    
    Benefits paid
    
    
    (130
    )
    
    
    (156
    )
    
    
    (2,375
    )
    
    
    (1,446
    )Fair value of plan assets at end of year
    
    $
    5,427
    
    
    $
    10,433
    
    
    $
    
    
    
    $
    Funded status at end of year
    
    $
    (13,676
    )
    
    $
    (16,701
    )
    
    $
    (35,449
    )
    
    $
    (34,877
    )
 118




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  RIGP
    
    
    Retiree Medical PlanDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Liabilities:Accrued employee benefit liabilities  current
    
    $
    
    
    
    $
    
    
    
    $
    3,287
    
    
    $
    2,297Accrued employee benefit liabilities  noncurrent
    
    $
    13,676
    
    
    $
    16,701
    
    
    $
    32,162
    
    
    $
    32,580Accumulated other comprehensive (income) loss:Net actuarial loss
    
    $
    9,416
    
    
    $
    12,437
    
    
    $
    11,508
    
    
    $
    13,488Prior service credit
    
    
    (46
    )
    
    
    (531
    )
    
    
    (10,283
    )
    
    
    (15,362
    )Total
    
    $
    9,370
    
    
    $
    11,906
    
    
    $
    1,225
    
    
    $
    (1,874
    )
  RIGPDecember 31,2009
    
    
    2008Projected benefit obligation
    
    $
    19,103
    
    
    $
    27,134Accumulated benefit obligation
    
    
    13,156
    
    
    
    16,112Fair value of plan assets
    
    
    5,427
    
    
    
    10,433
  RIGP
    
    
    Retiree Medical Plan2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Weighted average expense assumption
for the years ended December 31:Discount rate
    
    
    5.5
    %
    
    
    5.5
    %
    
    
    5.7
    %
    
    
    5.8
    %
    
    
    5.8
    %
    
    
    6.0
    %Expected return on plan assets
    
    
    7.5
    %
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ARate of compensation increase
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  RIGP
    
    
    Retiree Medical Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Weighted average balance sheet assumptions
as of December 31:Discount rate
    
    
    5.5
    %
    
    
    5.5
    %
    
    
    5.8
    %
    
    
    5.8
    %Rate of compensation increase
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    N/A
    
    
    
    N/A
   119




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1%
    
    
    1%Increase
    
    
    (Decrease)Effect on total service cost and interest
cost components
    
    $
    108
    
    
    $
    (96
    )Effect on postretirement benefit obligation
    
    
    1,262
    
    
    
    (1,130
    )
  RIGP
    
    
    Retiree Medical PlanYear Ended December 31,
    
    
    Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Components of net periodic benefit
cost:Service cost
    
    $
    495
    
    
    $
    723
    
    
    $
    808
    
    
    $
    339
    
    
    $
    382
    
    
    $
    669Interest cost
    
    
    1,182
    
    
    
    1,018
    
    
    
    1,034
    
    
    
    1,941
    
    
    
    1,947
    
    
    
    2,113Expected return on plan assets
    
    
    (570
    )
    
    
    (1,030
    )
    
    
    (864
    )
    
    
    
    
    
    
    
    
    
    
    Recognized gain due to curtailments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (749
    )
    
    
    
    
    
    
    Amortization of prior service cost benefit
    
    
    (485
    )
    
    
    (454
    )
    
    
    (454
    )
    
    
    (3,240
    )
    
    
    (3,438
    )
    
    
    (3,438
    )Actuarial loss due to settlements
    
    
    7,280
    
    
    
    1,371
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of unrecognized losses
    
    
    1,069
    
    
    
    296
    
    
    
    534
    
    
    
    1,016
    
    
    
    1,023
    
    
    
    1,429Net periodic benefit costs
    
    $
    8,971
    
    
    $
    1,924
    
    
    $
    1,058
    
    
    $
    (693
    )
    
    $
    (86
    )
    
    $
    773Other changes in plan assets and benefit
obligations recognized in OCI:Net actuarial loss (gain)
    
    $
    5,328
    
    
    $
    9,517
    
    
    $
    (158
    )
    
    $
    875
    
    
    $
    (2,669
    )
    
    $
    996Amortization of net actuarial gain
    
    
    (1,069
    )
    
    
    (296
    )
    
    
    (534
    )
    
    
    (1,016
    )
    
    
    (1,023
    )
    
    
    (1,429
    )Actuarial loss due to settlements
    
    
    (7,280
    )
    
    
    (1,371
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    485
    
    
    
    454
    
    
    
    454
    
    
    
    3,240
    
    
    
    3,438
    
    
    
    3,438Total recognized in OCI
    
    $
    (2,536
    )
    
    $
    8,304
    
    
    $
    (238
    )
    
    $
    3,099
    
    
    $
    (254
    )
    
    $
    3,005Total recognized in net period benefit cost
and OCI
    
    $
    6,435
    
    
    $
    10,228
    
    
    $
    820
    
    
    $
    2,406
    
    
    $
    (340
    )
    
    $
    3,778
  RetireeMedicalRIGP
    
    
    PlanAmortization of unrecognized losses
    
    $
    1,040
    
    
    $
    894Amortization of prior service cost benefit
    
    
    (45
    )
    
    
    (2,964
    )
 120




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  RetireeMedicalRIGP
    
    
    Plan2010
    
    $
    3,650
    
    
    $
    3,3812011
    
    
    1,229
    
    
    
    2,7572012
    
    
    1,448
    
    
    
    2,7852013
    
    
    1,361
    
    
    
    2,8582014
    
    
    1,409
    
    
    
    2,890Thereafter
    
    
    9,252
    
    
    
    14,329
   Quoted Pricesin Active
    
    
    UnobservableMarkets
    
    
    Inputs(Level 1)
    
    
    (Level 3)Mutual fund  equity securities (1)
    
    $
    1,701
    
    
    $
    Mutual fund  money market
    
    
    162
    
    
    
    Coal lease (2)
    
    
    
    
    
    
    3,564Fair value of plan assets at end of year
    
    $
    1,863
    
    
    $
    3,564
 
 (1)
    
    This mutual fund generally seeks long-term growth of capital and income and invests
in a diversified portfolio consisting of approximately 80% in equities and the remainder
in income-providing securities, such as preferred stocks, high-grade bonds or money
market securities.(2)
    
    This value was determined using an expected present value of future cash flows
valuation model. This plan asset relates to a 20.8% interest in a coal lease, which
derives value from specified minimum royalty payments received from CONSOL Energy Inc.
related to coal reserves mined from two Pennsylvania mines owned by the lessor. The coal
lease extends through 2023.  Coal LeaseBeginning balance, January 1, 2009
    
    $
    4,365Lease payments received
    
    
    381Unrealized loss
    
    
    (801
    )Transfers out of Level 3
    
    
    (381
    )Ending balance, December 31, 2009
    
    $
    3,564
 121




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Retirement and Savings Plan
    
 17.UNIT-BASED COMPENSATION PLANS
 Management Units
    122




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 BGH GPs Override Units
   ,
   123




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Number of Override UnitsTotalNumber ofOperating
    
    
    UnitsValue A Units
    
    
    Value B Units
    
    
    Units
    
    
    AwardedUnvested at January 1, 2008
    
    
    1,381
    
    
    
    1,381
    
    
    
    1,381
    
    
    
    4,143Granted in 2008
    
    
    382
    
    
    
    382
    
    
    
    382
    
    
    
    1,146Vested in 2008
    
    
    
    
    
    
    
    
    
    
    (518
    )
    
    
    (518
    )Unvested at December 31, 2008
    
    
    1,763
    
    
    
    1,763
    
    
    
    1,245
    
    
    
    4,771Granted in 2009
    
    
    212
    
    
    
    212
    
    
    
    212
    
    
    
    636Vested in 2009
    
    
    
    
    
    
    
    
    
    
    (422
    )
    
    
    (422
    )Forfeited in 2009
    
    
    (276
    )
    
    
    (276
    )
    
    
    (223
    )
    
    
    (775
    )Unvested at December 31, 2009
    
    
    1,699
    
    
    
    1,699
    
    
    
    812
    
    
    
    4,210
 Compensation Costs for Override UnitsValue A
    
    
    Value B
    
    
    OperatingUnits
    
    
    Units
    
    
    Units
    
    
    TotalsTotal fair value of all outstanding Override Units
    
    $
    3,587
    
    
    $
    2,179
    
    
    $
    5,808
    
    
    $
    11,574Less: Expense recorded from plan inception to
December 31, 2009
    
    
    
    
    
    
    
    
    
    
    (3,349
    )
    
    
    (3,349
    )Estimated future compensation costs at December 31,
2009
    
    $
    3,587
    
    
    $
    2,179
    
    
    $
    2,459
    
    
    $
    8,225
 December 31, 2009
    
    Value A
    
    Value B
    
    Operating2009 Weighted average fair value per unit granted
    
    $
    2.33
    
    
    $
    1.60
    
    
    $
    3.342008 Weighted average fair value per unit granted
    
    
    2.11
    
    
    
    1.43
    
    
    
    2.982007 Weighted average fair value per unit granted
    
    
    2.07
    
    
    
    1.17
    
    
    
    3.42
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Current equity value (in millions)
    
    $
    439.06
    
    
    $
    439.02
    
    
    $
    439.00Expected life in years
    
    
    3.4
    
    
    
    4.8
    
    
    
    5.5Risk-free interest rate
    
    
    1.8
    %
    
    
    3.0
    %
    
    
    4.9
    %Volatility
    
    
    45
    %
    
    
    35
    %
    
    
    26
    %Dividends
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
 Buckeyes 2009 LTIP
  124




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     2009 LTIP Awards
   125




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  WeightedAverageGrant DateFair ValueNumber of
    
    
    per LP UnitLP Units
    
    
    (1)
    
    
    Total ValueUnvested at January 1, 2009
    
    
    
    
    
    $
    
    
    
    $
    Granted
    
    
    159,640
    
    
    
    39.72
    
    
    
    6,340Vested
    
    
    (519
    )
    
    
    39.06
    
    
    
    (20
    )Forfeited
    
    
    (19,026
    )
    
    
    39.06
    
    
    
    (743
    )Unvested at December 31, 2009
    
    
    140,095
    
    
    $
    39.81
    
    
    $
    5,577
 
 (1)
    
    Determined by dividing the aggregate grant date fair value of awards by the number of
awards issued. The weighted-average grant date fair value per LP Unit for forfeited and
vested awards is determined before an allowance for forfeitures.  Buckeyes Option Plan
      126




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 18. EMPLOYEE STOCK OWNERSHIP PLAN
    
 19. RELATED PARTY TRANSACTIONS
     127




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 20. CASH DISTRIBUTIONS
  Amount PerRecord Date
    
    Payment Date
    
    Common UnitFebruary 6, 2007
    
    February 28, 2007
    
    $
    0.2250May 7, 2007
    
    May 31, 2007
    
    
    0.2400August 6, 2007
    
    August 31, 2007
    
    
    0.2500November 5, 2007
    
    November 30, 2007
    
    
    0.2650February 5, 2008
    
    February 29, 2008
    
    $
    0.2850May 9, 2008
    
    May 30, 2008
    
    
    0.3000August 8, 2008
    
    August 29, 2008
    
    
    0.3100November 7, 2008
    
    November 28, 2008
    
    
    0.3200February 12, 2009
    
    February 27, 2009
    
    $
    0.3300May 11, 2009
    
    May 29, 2009
    
    
    0.3500August 7, 2009
    
    August 31, 2009
    
    
    0.3700November 12, 2009
    
    November 30, 2009
    
    
    0.3900
  
 21. EARNINGS PER PARTNERSHIP UNIT
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Basic:Weighted average common units outstanding
    
    
    27,770
    
    
    
    27,770
    
    
    
    27,424Weighted average management units outstanding
    
    
    530
    
    
    
    530
    
    
    
    718Units for basic
    
    
    28,300
    
    
    
    28,300
    
    
    
    28,142Diluted:Units used for basic calculation
    
    
    28,300
    
    
    
    28,300
    
    
    
    28,142Dilutive effect of additional management units
    
    
    
    
    
    
    
    
    
    
    158Units for diluted
    
    
    28,300
    
    
    
    28,300
    
    
    
    28,300
 128




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 22. BUSINESS SEGMENTS
  Pipeline Operations
  Terminalling and Storage
  Natural Gas Storage
  Energy Services
  Development and Logistics
   129




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Revenue:Pipeline Operations
    
    $
    392,667
    
    
    $
    387,267
    
    
    $
    379,345Terminalling and Storage
    
    
    136,576
    
    
    
    119,155
    
    
    
    103,782Natural Gas Storage
    
    
    99,163
    
    
    
    61,791
    
    
    
    Energy Services
    
    
    1,125,013
    
    
    
    1,295,925
    
    
    
    Development and Logistics
    
    
    34,136
    
    
    
    43,498
    
    
    
    36,220Intersegment
    
    
    (17,183
    )
    
    
    (10,984
    )
    
    
    Total revenue
    
    $
    1,770,372
    
    
    $
    1,896,652
    
    
    $
    519,347Operating income:Pipeline Operations
    
    $
    93,957
    
    
    $
    149,349
    
    
    $
    146,878Terminalling and Storage
    
    
    61,084
    
    
    
    52,133
    
    
    
    40,581Natural Gas Storage
    
    
    30,574
    
    
    
    32,235
    
    
    
    Energy Services
    
    
    13,086
    
    
    
    5,905
    
    
    
    Development and Logistics
    
    
    5,099
    
    
    
    6,870
    
    
    
    7,894Total operating income
    
    $
    203,800
    
    
    $
    246,492
    
    
    $
    195,353Depreciation and amortization:Pipeline Operations
    
    $
    35,533
    
    
    $
    35,188
    
    
    $
    32,996Terminalling and Storage
    
    
    7,258
    
    
    
    6,051
    
    
    
    5,610Natural Gas Storage
    
    
    5,971
    
    
    
    4,599
    
    
    
    Energy Services
    
    
    4,204
    
    
    
    3,386
    
    
    
    Development and Logistics
    
    
    1,733
    
    
    
    1,610
    
    
    
    1,630Total depreciation and amortization
    
    $
    54,699
    
    
    $
    50,834
    
    
    $
    40,236
 130




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##### Table of Contents



BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Year Ended December 31,2009
    
    
    2008
    
    
    2007Capital additions:(1)Pipeline Operations
    
    $
    34,209
    
    
    $
    38,182
    
    
    $
    47,563Terminalling and Storage
    
    
    20,927
    
    
    
    30,245
    
    
    
    18,341Natural Gas Storage
    
    
    20,860
    
    
    
    49,514
    
    
    
    Energy Services
    
    
    7,317
    
    
    
    4,191
    
    
    
    Development and Logistics
    
    
    700
    
    
    
    297
    
    
    
    1,963Total capital additions
    
    $
    84,013
    
    
    $
    122,429
    
    
    $
    67,867Acquisitions and equity investments,net of cash acquired:Pipeline Operations
    
    $
    12,188
    
    
    $
    19,169
    
    
    $
    1,933Terminalling and Storage
    
    
    43,593
    
    
    
    66,242
    
    
    
    38,793Natural Gas Storage
    
    
    
    
    
    
    438,806
    
    
    
    Energy Services
    
    
    2,532
    
    
    
    143,306
    
    
    
    Development and Logistics
    
    
    
    
    
    
    
    
    
    
    Total acquisitions and equity investments, net
    
    $
    58,313
    
    
    $
    667,523
    
    
    $
    40,726
 December 31,2009
    
    
    2008
    
    
    2007Total Assets:Pipeline Operations (2)
    
    $
    1,592,916
    
    
    $
    1,630,050
    
    
    $
    1,673,744Terminalling and Storage
    
    
    532,971
    
    
    
    473,806
    
    
    
    385,446Natural Gas Storage
    
    
    573,261
    
    
    
    503,278
    
    
    
    Energy Services
    
    
    482,025
    
    
    
    333,967
    
    
    
    Development and Logistics
    
    
    74,476
    
    
    
    93,309
    
    
    
    74,462Consolidating level
    
    
    230,922
    
    
    
    228,687
    
    
    
    220,674Total assets
    
    $
    3,486,571
    
    
    $
    3,263,097
    
    
    $
    2,354,326Goodwill:Pipeline Operations
    
    $
    198,632
    
    
    $
    198,632
    
    
    $
    198,632Terminalling and Storage (3)
    
    
    49,618
    
    
    
    51,386
    
    
    
    22,789Natural Gas Storage
    
    
    169,560
    
    
    
    169,560
    
    
    
    Energy Services
    
    
    1,132
    
    
    
    1,132
    
    
    
    Development and Logistics
    
    
    13,182
    
    
    
    13,182
    
    
    
    13,182Total goodwill
    
    $
    432,124
    
    
    $
    433,892
    
    
    $
    234,603
 
 (1)
    
    Amount includes ($3.3) million and $2.0 million of non-cash changes in accruals for capital
expenditures for the years ended December 31, 2009 and 2008, respectively.(2)
    
    All equity investments are included in the assets of the Pipeline Operations segment.(3)
    
    Goodwill decreased by $1.8 million as of December 31, 2009 from December 31, 2008 due to the
finalization of the purchase price allocation relating to the acquisition of a terminal in
Albany, New York in 2008; this $1.8 million was allocated to property, plant and equipment. 131




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BUCKEYE GP HOLDINGS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 23. SUPPLEMENTAL CASH FLOW INFORMATION
  Year Ended December 31,2009
    
    2008
    
    2007Cash paid for interest (net of capitalized interest)
    
    $
    66,264
    
    
    $
    63,647
    
    
    $
    50,956Cash paid for income taxes
    
    
    2,316
    
    
    
    1,063
    
    
    
    1,095Capitalized interest
    
    
    3,401
    
    
    
    2,355
    
    
    
    1,469Non-cash changes in assets and liabilities:Change in capital expenditures in accounts payable
    
    $
    (3,296
    )
    
    $
    1,957
    
    
    $
    2,377Hedge accounting
    
    
    18,450
    
    
    
    3,357
    
    
    
    6,951Environmental liability assumed in acquisition
    
    
    1,480
    
    
    
    5,644
    
    
    
    
 
 24. QUARTERLY FINANCIAL DATA (UNAUDITED)
  First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Total2009Revenue
    
    $
    416,840
    
    
    $
    351,220
    
    
    $
    423,444
    
    
    $
    578,868
    
    
    $
    1,770,372Operating income (loss) (1)
    
    
    68,865
    
    
    
    (35,432
    )
    
    
    74,889
    
    
    
    95,478
    
    
    
    203,800Net income (loss) (1)
    
    
    53,696
    
    
    
    (48,384
    )
    
    
    58,370
    
    
    
    77,955
    
    
    
    141,637Net income attributable to Buckeye GP Holdings L.P. (1)
    
    
    10,149
    
    
    
    9,772
    
    
    
    11,095
    
    
    
    18,578
    
    
    
    49,594Earnings per partnership unit  basic and diluted (2)
    
    $
    0.36
    
    
    $
    0.35
    
    
    $
    0.39
    
    
    $
    0.66
    
    
    $
    1.752008Revenue
    
    $
    380,275
    
    
    $
    492,548
    
    
    $
    496,170
    
    
    $
    527,659
    
    
    $
    1,896,652Operating income
    
    
    56,094
    
    
    
    56,986
    
    
    
    63,251
    
    
    
    70,161
    
    
    
    246,492Net income
    
    
    40,585
    
    
    
    40,297
    
    
    
    46,705
    
    
    
    53,036
    
    
    
    180,623Net income attributable to Buckeye GP Holdings L.P.
    
    
    5,849
    
    
    
    5,317
    
    
    
    7,234
    
    
    
    8,077
    
    
    
    26,477Earnings per partnership unit  basic and diluted (2)
    
    $
    0.21
    
    
    $
    0.19
    
    
    $
    0.26
    
    
    $
    0.29
    
    
    $
    0.94
 
 (1)
    
    The second quarter of 2009 includes an impairment charge of $72.5 million related to
assets held for sale and reorganization expenses of $28.1 million. The fourth quarter of 2009
includes a reversal of $12.8 million of the previously recognized impairment charge. See
Notes 8 and 3, respectively.(2)
    
    The sum of the per partnership unit amounts per quarter does not equal the amount presented
for the years ended December 31, 2009 and 2008 due to rounding. 132




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Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A.
    
    Controls and Procedures
         
 Item 9B.
    
    Other Information
  133




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PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
  Directors of MainLine Management
  Name
    
    Age
    
    Position with Our General PartnerForrest E. Wylie.
    
    
    46
    
    
    Chairman of the Board, CEO and Director (1)Christopher L. Collins
    
    
    36
    
    
    DirectorJohn F. Erhard.
    
    
    35
    
    
    DirectorJoseph A. LaSala, Jr.
    
    
    55
    
    
    Director (1) (2)Frank J. Loverro.
    
    
    41
    
    
    DirectorFrank S. Sowinski.
    
    
    53
    
    
    Director (2)Robb E. Turner.
    
    
    47
    
    
    DirectorMartin A. White.
    
    
    68
    
    
    Director (2)
 
 (1)
    
    Also a director of Services Company.(2)
    
    Director is an independent director of MainLine Management and is not otherwise affiliated
with MainLine Management or its parent companies. Mr. Wylie
 Mr. Collins
 Mr. Erhard
 134




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Mr. LaSala
 Mr. Loverro
 Mr. Sowinski
 Mr. Turner
 Mr. White
 135




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##### Table of Contents



Executive Officers of BGH
  Name
    
    Age
    
    Position with Our General PartnerRobert A. Malecky.
    
    
    46
    
    
    Vice President, Customer ServicesKhalid A. Muslih.
    
    
    38
    
    
    Vice President, Corporate DevelopmentWilliam H. Schmidt, Jr.
    
    
    37
    
    
    Vice President, General Counsel and SecretaryClark C. Smith.
    
    
    55
    
    
    President and Chief Operating OfficerKeith E. St.Clair.
    
    
    53
    
    
    Senior Vice President and CFO
 Mr. Malecky
 Mr. Muslih
 Mr. Schmidt
 Mr. Smith
 Mr. St.Clair
 Section 16(a) Beneficial Ownership Reporting Compliance
  136




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##### Table of Contents



Committees of the Board of Directors
 Audit Committee
  www.buckeyegp.com
  www.buckeyegp.com
 Compensation Committee, Compensation Committee Interlocks and Insider Participation
   Corporate Governance Matters
  137




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www.buckeyegp.com
 www.nyse.com
 Communication with the Board of Directors
  NYSE Corporate Governance Listing Standards
  
 Item 11. Executive Compensation
   2009 Director Compensation Table
 Fees Earned or
    
    Unit
    
    OtherName
    
    Paid in Cash
    
    Awards (1)
    
    Compensation (2)
    
    TotalChristopher L. Collins
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    John F. Erhard
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael B. Goldberg
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joseph A. LaSala, Jr.
    
    
    65,000
    
    
    
    117,165
    
    
    
    8,213
    
    
    
    190,378Frank J. Loverro
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Frank S. Sowinski
    
    
    87,500
    
    
    
    117,165
    
    
    
    8,213
    
    
    
    212,878Robb E. Turner
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Martin A. White
    
    
    51,250
    
    
    
    117,165
    
    
    
    8,213
    
    
    
    176,628
 138




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##### Table of Contents



(1)
    
    Amounts reflect the aggregate grant date fair value (computed in accordance with FASB ASC
Topic 718) of Buckeyes phantom unit awards under the 2009 LTIP in 2009. For a discussion of
the valuations of the phantom units, please see the discussion in Note 17 in the Notes to
Consolidated Financial Statements. As of December 31, 2009, Messrs. LaSala, Sowinski and White
each held 3,000 phantom units.(2)
    
    Amounts represent the distribution equivalent rights paid during 2009 on unvested phantom
unit awards granted under the 2009 LTIP. Director Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder
Matters
  Number ofBGH
    
    Percent ofCommon &
    
    Common &Management
    
    ManagementName of Beneficial Owner:
    
    Units (1)
    
    UnitsChristopher L. Collins
    
    
    17,513,737
    
    
    
    61.9%
    (2)(3)John F. Erhard
    
    
    
    
    
    
    Joseph A. LaSala, Jr
    
    
    
    
    
    
    Frank J. Loverro
    
    
    17,513,737
    
    
    
    61.9%
    (2)(3)Robert A. Malecky
    
    
    45,000
    
    
    
    *
    (4)Khalid A. Muslih
    
    
    
    
    
    
    Stephen C. Muther
    
    
    47,900
    
    
    
    *
    (5)Clark C. Smith
    
    
    
    
    
    
    Frank S. Sowinski
    
    
    8,100
    
    
    
    *Keith E. St.Clair
    
    
    
    
    
    
    Robb E. Turner
    
    
    17,513,737
    
    
    
    61.9%
    (2)(3)Martin A. White
    
    
    
    
    
    
    Forrest E. Wylie
    
    
    17,513,737
    
    
    
    61.9%
    (2)(3)All directors and executive officers as a group (consisting of 13 persons)
    
    
    17,567,837
    
    
    
    62.1%
    (6)Other 5% Unitholders:BGH GP Holdings
    
    
    17,513,737
    
    
    
    61.9%
    (2)(3)Goldman Sachs
    
    
    2,206,734
    
    
    
    7.8%
    (7)Neuberger Berman
    
    
    1,483,794
    
    
    
    5.2%
    (8)
 139




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##### Table of Contents



*
    
    Less than 1%(1)
    
    Unless otherwise indicated, the persons named above have sole voting and investment
power over the Common and Management Units reported.(2)
    
    Includes Management Units, which are convertible into Common Units, at the election of
the holder, on a one-for-one basis.(3)
    
    Includes Common and Management Units owned by BGH GP, the sole member of MainLine
Management. BGH GP is governed by a Board of Directors which includes Messrs. Collins,
Loverro, Turner and Wylie, each of whom is also a director of MainLine Management.
Therefore, each of these directors has shared voting and investment power over the
securities indicated. BGH GP is primarily owned by investment partnerships affiliated with
ArcLight, Kelso and certain other investment funds. The address of BGH GP is c/o ArcLight
Capital Partners, LLC, 200 Clarendon Street, 55th Floor, Boston, Massachusetts 02117. Each
of Messrs. Collins, Loverro, Turner, and Wylie expressly disclaims beneficial ownership of
such Common and Management Units of BGH.(4)
    
    Mr. Malecky shares investment and voting power over 28,157 Common Units with his wife.(5)
    
    Effective February 17, 2009, Mr. Muther resigned from his position as President of
Buckeye GP due to his pending retirement which occurred on June 30, 2009.(6)
    
    The 17,513,737 Common and Management Units are included in the total only once.(7)
    
    The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. filed a Schedule 13G on February
12, 2010, to report that, as of December 31, 2009, it had beneficial ownership of, and
shared dispositive power over 2,206,734 Common Units of BGH, representing 7.8% of the total
outstanding Common Units of BGH, as of that date. The address for both Goldman Sachs
Group, Inc. and Goldman, Sachs & Co. is 85 Broad Street, New York, NY 10004.(8)
    
    Neuberger Berman Group LLC (NBG), Alternatives Advisers LLC (NB Alternatives), NB
Co-Investment Partners LP (NB Partners) and NB Co-Investment Associates LP (NB
Associates) filed a Schedule 13G on February 16, 2010 to report that, as of December 31,
2009, they had shared voting power over 1,483,794 Common Units of BGH. NBG and NB
Alternatives beneficially owned, and had shared dispositive power over, 1,483,794 Common
Units of BGH and NB Partners and NB Associates beneficially owned, and had shared
dispositive power over, 1,396,469 Common Units of BGH. The address for each of NBG, NB
Alternatives, NB Partners and NB Associates is 605 Third Avenue, New York, New York 10158. Buckeye Partners, L.P.
   140




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##### Table of Contents



Number ofName
    
    LP Units (1)Christopher L. Collins
    
    
    80,000
    (2)John F. Erhard
    
    
    80,000
    (2)Joseph A. LaSala, Jr
    
    
    80,000
    (2)Frank J. Loverro
    
    
    80,000
    (2)Robert A. Malecky
    
    
    33,900
    (3)Khalid A. Muslih
    
    
    Stephen C. Muther
    
    
    24,300
    (4)Clark C. Smith
    
    
    3,000
    (5)Frank S. Sowinski
    
    
    85,500
    (2)Keith E. St.Clair
    
    
    Robb E. Turner
    
    
    80,000
    (2)Martin A. White
    
    
    80,000
    (2)Forrest E. Wylie
    
    
    82,500
    (2)All directors and executive officers as a group (consisting of 13 persons)
    
    
    129,900
    (6)
 
 (1)
    
    Unless otherwise indicated, the persons named above have sole voting and investment
power over the LP Units reported.(2)
    
    Includes the 80,000 LP Units owned by BGH over which the indicated persons share voting
and investment power by virtue of their membership on the Board of Directors of MainLine
Management, the general partner of BGH. Such individuals expressly disclaim beneficial
ownership of such LP Units.(3)
    
    Mr. Malecky shares investment and voting power over the 9,500 LP Units with his wife.
Amount also includes 24,400 LP Units issuable upon exercise of outstanding options.(4)
    
    Effective February 17, 2009, Mr. Muther resigned from his position as President of
Buckeye GP due to his pending retirement. Mr. Muther continued as an employee of Services
Company through June 30, 2009.(5)
    
    Mr. Smith shares investment and voting power over the 3,000 LP Units with his wife.(6)
    
    The 80,000 Units owned by Buckeye GP Holdings L.P. are included in the total only once.
Amount also includes 27,400 LP Units issuable upon exercise of outstanding options. Changes in Control
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
 General Partner Reimbursement and Distributions
 Reimbursement of General Partner Costs and Expenses
  Management Fee
  141




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Ownership of Buckeye GP
  
    
    the incentive distribution rights in Buckeye;
    
    approximately a 1% general partner interest in each of Buckeye Pipe Line, Laurel,
Everglades and BPH; and
    
    243,914 general partner units in Buckeye.
   Distribution Rights
     142




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Annual Fixed Payment
     Policies Regarding Related Party Transactions
 www.buckeyegp.com
   143




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Director Independence
  
    
    the director is, or has been within the last three years, our employee, or an
immediate family member is, or has been within the last three years, our executive
officer;
    
    the director has received, or has an immediate family member who has received,
during any twelve-month period within the last three years, more than $120,000 in
direct compensation from us, other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided such compensation is
not contingent in any way on continued service);
    
    (i) the director or an immediate family member is a current partner of a firm that
is our internal or external auditor; (ii) the director is a current employee of such a
firm; (iii) the director has an immediate family member who is a current employee of
such a firm and who participates in the firms audit, assurance or tax compliance (but
not tax planning) practice; or (iv) the director or an immediate family member was
within the last three years (but is no longer) a partner or employee of such a firm and
personally worked on our audit within that time;
    
    the director or an immediate family member is, or has been within the last three
years, employed as an executive officer of another company where any of our present
executive officers at the same time serve or served on that companys Compensation
Committee;
    
    the director is a current employee, or an immediate family member is a current
executive officer, of a company that has made payments to, or received payments from,
us for property or services in an amount which, in any of the last three fiscal years,
exceeds the greater of $1.0 million, or 2% of such other companys consolidated gross
revenues; or
    
    the director serves as an executive officer of a charitable organization and, during
any of the past three fiscal years, we made charitable contributions to the charitable
organization in any single fiscal year that exceeded $1.0 million or 2%, whichever is
greater, of the charitable organizations consolidated gross revenues.
  144




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##### Table of Contents



Item 14. Principal Accounting Fees and Services
  Year Ended December 31,2009
    
    
    2008Audit fees (1)
    
    $
    222,500
    
    
    $
    304,000Audit- related fees (2)
    
    
    
    
    
    
    Tax fees (3)
    
    
    135,520
    
    
    
    210,933All other fees (4)
    
    
    
    
    
    
    Total
    
    $
    358,020
    
    
    $
    514,933
 
 (1)
    
    Audit fees represent amounts billed for each of the years presented for professional
services rendered in connection with (i) the audit of our annual financial statements and
internal control over financial reporting, (ii) the review of our quarterly financial
statements or (iii) those services normally provided in connection with statutory and
regulatory filings or engagements including comfort letters, consents and other services
related to SEC matters. This information is presented as of the latest practicable date for
this Report.(2)
    
    Audit-related fees represent amounts we were billed in each of the years presented for
assurance and related services that are reasonably related to the performance of the annual
audit or quarterly review. This category primarily includes services relating to fees for
audits of financial statements of certain employee benefits plans.(3)
    
    Tax fees represent amounts we were billed in each of the years presented for professional
services rendered in connection with tax compliance, tax advice and tax planning. This
category primarily includes services relating to the preparation of Unitholder annual K-1
statements and partnership tax planning.(4)
    
    All other fees represent amounts we were billed in each of the years presented for services
not classifiable under the other categories listed in the table above. No such services were
rendered by Deloitte & Touche during the last two years. Procedures for Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Registered Public Accountant
  145




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##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 (a)
    
    The following documents are filed as a part of this Report:
 (1)
    
    Financial Statements  see Index to Consolidated Financial Statements.(2)
    
    Financial Statement Schedules  None.(3)
    
    Exhibits, including those incorporated by reference. The following is a list of
exhibits filed as part of this Report.
 ExhibitNumber
    
    Description3.1
    
    Certificate of Limited Partnership of Buckeye GP Holdings L.P., dated
March 7, 2006 (Incorporated by reference to Exhibit 3.1 of Buckeye GP
Holdings L.P.s Registration Statement on Form S-1 filed on April 20,
2006).3.2
    
    First Amended and Restated Agreement of Limited Partnership of
Buckeye GP Holdings L.P., dated as of August 9, 2006 (Incorporated by
reference to Exhibit 3.1 of Buckeye GP Holdings L.P.s Form 8-K filed
on August 14, 2006).10.1
    
    Amended and Restated Contribution, Conveyance and Assumption
Agreement, dated as of August 9, 2006, among the limited partners of
MainLine L.P., MainLine L.P., Buckeye GP LLC, Buckeye GP Holdings
L.P., MainLine Management LLC, and MainLine GP, Inc. (Incorporated by
reference to Exhibit 10.1 of Buckeye GP Holdings L.P.s Current
Report on Form 8-K filed on August 14, 2006 ).10.2
    
    Indenture dated as of July 10, 2003, between Buckeye Partners, L.P.
and SunTrust Bank, as Trustee (Incorporated by reference to Exhibit
4.1 of Buckeye Partners, L.P.s Registration Statement on Form S-4
filed September 19, 2003).10.3
    
    First Supplemental Indenture dated as of July 10, 2003, between
Buckeye Partners, L.P. and SunTrust Bank, as Trustee (Incorporated by
reference to Exhibit 4.2 of Buckeye Partners, L.P.s Registration
Statement on Form S-4 filed September 19, 2003).10.4
    
    Second Supplemental Indenture dated as of August 19, 2003, between
Buckeye Partners, L.P. and SunTrust Bank, as Trustee (Incorporated by
reference to Exhibit 4.3 of Buckeye Partners, L.P.s Registration
Statement on Form S-4 filed September 19, 2003).10.5
    
    Third Supplemental Indenture dated as of October 12, 2004, between
Buckeye Partners, L.P. and SunTrust Bank, as Trustee (Incorporated by
reference to Exhibit 4.1 of Buckeye Partners, L.P.s Current Report
on Form 8-K filed on October 14, 2004).10.6
    
    Fourth Supplemental Indenture dated as of June 30, 2005, between
Buckeye Partners, L.P. and SunTrust Bank, as Trustee (Incorporated by
reference to Exhibit 4.1 of Buckeye Partners, L.P.s Current Report
on Form 8-K filed on June 30, 2005).10.7
    
    Fifth Supplemental Indenture dated as of January 11, 2008, between
Buckeye Partners, L.P. and U.S. Bank National Association (successor
to SunTrust Bank) (Incorporated by reference to Exhibit 4.1 of
Buckeye Partners, L.P.s Current Report on Form 8-K filed on January
11, 2008).10.8
    
    Sixth Supplemental Indenture dated as of August 18, 2009, between
Buckeye Partners, L.P. and U.S. Bank National Association
(successor-in-interest to SunTrust Bank), as Trustee (Incorporated by
reference to Exhibit 4.1 of Buckeye Partners, L.P.s Current Report
on Form 8-K filed on August 24, 2009).
 146




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##### Table of Contents



ExhibitNumber
    
    Description10.9
    
    Amended and Restated Agreement of Limited Partnership of Buckeye Partners,
L.P., dated as of April 14, 2008, effective as of January 1, 2007
(Incorporated by reference to Exhibit 3.1 of Buckeye Partners, L.P.s Current
Report on Form 8-K filed on April 15, 2008).10.10
    
    Amended and Restated Management Agreement between MainLine L.P. and Buckeye
Pipe Line Company, L.P., as amended and restated as of August 9, 2006
(Incorporated by reference to Exhibit 10.5 of Buckeye GP Holdings L.P.s
Current Report on Form 8-K filed on August 14, 2006). (1)10.11
    
    Services Agreement dated as of December 15, 2004, among Buckeye Partners,
L.P., certain of its subsidiaries and Buckeye Pipe Line Services Company
(Incorporated by reference to Exhibit 10.3 of Buckeye Partners L.P.s Current
Report on Form 8-K dated December 20, 2004).10.12
    
    First Amendment to Services Agreement, dated as of October 15, 2008, among
Buckeye Partners, L.P., Buckeye Pipe Line Services Company, and the subsidiary
partnerships and limited liability companies of Buckeye Partners, L.P. set
forth on the signature pages thereto. (Incorporated by reference to Exhibit
10.2 of Buckeye Partners L.P.s Current Report on Form 8-K dated October 16,
2008).10.13
    
    Fifth Amended and Restated Exchange Agreement, dated as of October 15, 2008,
among Buckeye GP Holdings L.P., Buckeye GP LLC, Buckeye Partners, L.P.,
MainLine L.P., Buckeye Pipe Line Company, L.P., Laurel Pipe Line Company,
L.P., Everglades Pipe Line Company, L.P., and Buckeye Pipe Line Holdings, L.P.
(Incorporated by reference to Exhibit 10.6 of Buckeye Partners L.P.s Annual
Report on Form 10-K for the year ended December 31, 2008).10.14
    
    Acknowledgement and Agreement, dated as of May 6, 2002, between Buckeye
Partners, L.P. and Glenmoor, Ltd. (Incorporated by reference to Exhibit 10.13
of Buckeye GP Holdings L.P.s Registration Statement on Form S-1 filed on
April 20, 2006).*10.15
    
    Amended and Restated Employment Agreement, dated October 25, 2007, by and
among Stephen C. Muther, Buckeye GP Holdings L.P. and Buckeye Pipe Line
Services Company (Incorporated by reference to Exhibit 10.1 of Buckeye GP
Holdings L.P.s Current Report on Form 8-K filed on October 26, 2007).*10.16
    
    Severance Agreement, dated as of November 10, 2008, by and among Buckeye
Partners, L.P., Buckeye GP Holdings L.P., Buckeye Pipe Line Services Company,
and Keith E. St.Clair (Incorporated by reference to Exhibit 10.1 of Buckeye GP
Holdings L.P.s Current Report on Form 8-K filed on November 10, 2008).*10.17
    
    Severance Agreement, dated as of February 17, 2009, by and among Buckeye
Partners, L.P., Buckeye Pipe Line Services Company, and Clark C. Smith
(Incorporated by reference to Exhibit 10.1 of Buckeye Partners, L.P.s Current
Report on Form 8-K filed on February 17, 2009).*10.18
    
    Amended and Restated Management Agreement, dated as of December 15, 2004,
among Buckeye GP LLC and MainLine Sub LLC (Incorporated by reference to
Exhibit 10.9 of Buckeye Partners, L.P.s Current Report on Form 8-K filed on
December 20, 2004).*10.19
    
    Amended and Restated Unit Option and Distribution Equivalent Plan of Buckeye
Partners, L.P., dated as of April 24, 2002 (Incorporated by reference to
Exhibit 10.11 of Buckeye Partners, L.P.s Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2002).*10.20
    
    Amended and Restated Unit Option Loan Program of Buckeye Pipe Line Company
dated as of April 24, 2002 (Incorporated by reference to Exhibit 10.12 of
Buckeye Partners, L.P.s Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2002).*10.21
    
    Buckeye Partners, L.P. 2009 Long-Term Incentive Plan, as amended (Incorporated
by reference to Exhibit 10.1 of Buckeye Partners, L.P.s Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2009).*10.22
    
    Buckeye Partners, L.P. Annual Incentive Compensation Plan, as amended and
restated, effective as of January 1, 2010 (Incorporated by reference to
Exhibit 10.13 of Buckeye Partners, L.P.s Annual Report on Form 10-K for the
year ended December 31, 2009).10.23
    
    Amended and Restated Executive Employment Agreement, dated as of August 9,
2006, among Buckeye GP LLC, MainLine Sub LLC, MainLine L.P., MainLine GP, Inc.
and Buckeye Pipe Line Services
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##### Table of Contents



ExhibitNumber
    
    DescriptionCompany (Incorporated by reference to Exhibit
10.7 of Buckeye GP Holdings L.P.s Current Report on Form 8-K filed on August
14, 2006).*10.24
    
    Full Waiver and Release of Claims, dated as of Mary 8, 2009, by Vance E.
Powers (Incorporated by reference to Exhibit 10.1 of Buckeye Partners, L.P.s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009).10.25
    
    Termination Agreement, dated as of October 15, 2008, among Buckeye GP LLC,
Buckeye GP Holdings L.P., MainLine L.P., MainLine GP, Inc. and Buckeye Pipe
Line Services Company (Incorporated by reference to Exhibit 10.2 of Buckeye GP
Holdings L.P.s Current Report on Form 8-K filed on October 16, 2008).10.26
    
    Credit Agreement, dated as of August 9, 2006, among Buckeye GP Holdings L.P.,
as borrower, SunTrust Bank, as administrative agent, and the lenders signatory
hereto (Incorporated by reference to Exhibit 10.8 of Buckeye GP Holdings
L.P.s Current Report on Form 8-K filed on August 14, 2006).10.27
    
    First Amendment to Credit Agreement, dated as of May 18, 2007, by and among
Buckeye GP Holdings L.P., as borrower, SunTrust Bank, as administrative agent,
and the lenders signatory thereto (Incorporated by reference to Exhibit 10.2
of Buckeye GP Holdings L.P.s Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2007).10.28
    
    Supplement to Pledge Agreement  Additional Pledgor, dated as of September
15, 2006, among Buckeye GP Holdings L.P., as borrower, SunTrust Bank, as
administrative agent, and the lenders signatory hereto (Incorporated by
reference to Exhibit 10.9 of Buckeye GP Holdings L.P.s Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2006).10.29
    
    Credit Agreement, dated November 13, 2006, among Buckeye Partners, L.P., as
borrower, SunTrust Bank, as administrative agent, and the lenders signatory
thereto (Incorporated by reference to Exhibit 10.1 of Buckeye Partners, L.P.s
Current Report on Form 8-K filed on November 16, 2006).10.30
    
    First Amendment to Credit Agreement, dated as of May 18, 2007, by and among
Buckeye Partners, L.P., as borrower, SunTrust Bank, as administrative agent,
and the lenders signatory thereto (Incorporated by reference to Exhibit 10.1
of Buckeye GP Holdings L.P.s Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2007).10.31
    
    Second Amendment to Credit Agreement, dated August 24, 2007, among Buckeye
Partners, L.P., SunTrust Bank, as administrative agent, and the lenders
signatory thereto (Incorporated by reference to Exhibit 10.1 of Buckeye GP
Holdings L.P.s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2007).10.32
    
    Third Amendment to Credit Agreement, dated January 23, 2008, among Buckeye
Partners, L.P., SunTrust Bank, as administrative agent, and the lenders
signatory thereto (Incorporated by reference to Exhibit 10.1 of Buckeye
Partners L.P.s Current Report on Form 8-K filed on January 28, 2008).10.33
    
    Fourth Amendment to Credit Agreement, dated August 21, 2009, among Buckeye
Partners, L.P., SunTrust Bank, as administrative agent, and the lenders
signatory thereto (Incorporated by reference to Exhibit 10.2 of Buckeye
Partners, L.P.s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2009).10.34
    
    Credit Agreement, dated as of May 20, 2008, by and among Farm & Home Oil
Company LLC, Buckeye Energy Services LLC, BNP Paribas and other lenders party
thereto (Incorporated by reference to Exhibit 10.1 of Buckeye Partners L.P.s
Current Report on Form 8-K filed on May 23, 2008).10.35
    
    First Amendment, dated as of July 18, 2008, to the Credit Agreement, dated as
of May 20, 2008, among Farm & Home Oil Company LLC, Buckeye Energy Services
LLC, BNP Paribas and other lenders party thereto (Incorporated by reference to
Exhibit 10.1 of Buckeye Partners L.P.s Current Report on Form 8-K filed on
July 22, 2008).10.36
    
    Second Amendment, dated as of September 15, 2008, to the Credit Agreement,
dated as of May 20, 2008, among Farm & Home Oil Company LLC, Buckeye Energy
Services LLC, BNP Paribas and other lenders party thereto (Incorporated by
reference to Exhibit 10.1 of Buckeye Partners L.P.s Annual Report on Form
10-K for the year ended December 31, 2008).
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##### Table of Contents



ExhibitNumber
    
    Description10.37
    
    Third Increase Agreement and Waiver, dated as of August 12, 2009, to the
Credit Agreement, dated as of May 20, 2008, among Buckeye Energy Services LLC,
BNP Paribas and other lenders party thereto (Incorporated by reference to
Exhibit 10.1 of Buckeye Partners, L.P.s Current Report on Form 8-K filed on
August 14, 2009).**21.1
    
    Subsidiaries of the Registrant**23.1
    
    Consent of Deloitte & Touche LLP**31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14 (a) under the
Securities Exchange Act of 1934.**31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934.**32.1
    
    Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.**32.2
    
    Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
 
 *
    
    Represents management contract or compensatory plan or arrangement.**
    
    Filed herewith.(1)
    
    The Amended and Restated Management Agreement between MainLine L.P. and each of Everglades
Pipe Line Company, L.P., Laurel Pipe Line Company, L.P. and Buckeye Pipe Line Holdings, L.P.
are not filed because they are identical to Exhibit 10.9 except for the identity of the
partnership. (b)
    
    Exhibits  See Item 15(a)(3) above.
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##### Table of Contents



Buckeye GP Holdings L.P.
(Registrant)By:
    MainLine Management LLC,as General PartnerDated: March 2, 2010
    By:
    /s/ Forrest E. WylieForrest E. WylieChief Executive Officer
(Principal Executive Officer)  Dated:  March 2, 2010
    By:
    /s/      Christopher L. CollinsChristopher L. CollinsDirectorDated:  March 2, 2010
    By:
    /s/      John F. ErhardJohn F. ErhardDirectorDated:  March 2, 2010
    By:
    /s/      Joseph A. LaSala, Jr.Joseph A. LaSala, Jr.DirectorDated:  March 2, 2010
    By:
    /s/      Frank J. LoverroFrank J. LoverroDirectorDated:  March 2, 2010
    By:
    /s/       Frank S. SowinskiFrank S. SowinskiDirectorDated:  March 2, 2010
    By:
    /s/      Keith E. St.ClairKeith E. St.ClairSenior Vice President and Chief Financial
Officer
(Principal Financial Officer
and Principal Accounting Officer)Dated:  March 2, 2010
    By:
    /s/       Robb E. TurnerRobb E. TurnerDirectorDated:  March 2, 2010
    By:
    /s/      Martin A. WhiteMartin A. WhiteDirectorDated:  March 2, 2010
    By:
    /s/       Forrest E. WylieForrest E. WylieDirector 150