Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP
Holdings (NYSE: PAGP) today reported fourth-quarter and full-year
2015 results.
Plains All American Pipeline,
L.P.
Summary Financial
Information (1) (unaudited)
(in millions, except per unit data)
Three Months Ended
Twelve Months Ended December 31, December 31,
2015 2014 %
Change
2015 2014 %
Change
Net income attributable to PAA $ 247 $ 389 (37 )% $ 903 $
1,384 (35 )%
Diluted net income per common unit $ 0.24 $
0.67 (64 )% $ 0.77 $ 2.38 (68 )%
Diluted weighted average common
units outstanding 399 375 6 % 396 369 7 %
EBITDA $ 506 $
664 (24 )% $ 1,870 $ 2,289 (18 )%
Three Months
Ended Twelve Months Ended December 31,
December 31, 2015 2014 %
Change
2015 2014 %
Change
Adjusted net income attributable to PAA $ 304 $ 362 (16 )% $
1,191 $ 1,347 (12 )%
Diluted adjusted net income per common
unit $ 0.38 $ 0.60 (37 )% $ 1.48 $ 2.28 (35 )%
Adjusted
EBITDA $ 563 $ 594 (5 )% $ 2,168 $ 2,200 (1 )%
Distribution
per common unit declared for the period $ 0.700 $ 0.675 3.7 %
(1)
PAA’s reported results include the impact
of items that affect comparability between reporting periods. The
impact of certain of these items is excluded from adjusted results.
See the section of this release entitled "Non-GAAP Financial
Measures and Selected Items Impacting Comparability" and the tables
attached hereto for information regarding certain selected items
that PAA believes impact comparability of financial results between
reporting periods, as well as for information regarding non-GAAP
financial measures (such as adjusted EBITDA) and their
reconciliation to the most directly comparable measures as reported
in accordance with GAAP.
“PAA reported fourth-quarter and full-year 2015 results with
adjusted EBITDA of $563 million and $2.17 billion, respectively,
which were slightly below the low end of our guidance ranges issued
last November,” said Greg Armstrong, Chairman and CEO of Plains All
American. “Our fourth-quarter results were negatively impacted by
approximately $15 million associated with deficiencies on minimum
volume commitments and an approximate $15 million shift in earnings
recognition on certain NGL sales activities from the fourth quarter
of 2015 to the first quarter of 2016. This earnings shift is
primarily the result of delayed inventory draws due to unseasonably
warm temperatures in certain parts of the U.S. and Canada as well
as impacts of inventory pricing during the fourth quarter.
Additionally, severe weather in West Texas and the Mid-continent
resulted in volume shortfalls impacting results by approximately $5
million.”
Armstrong stated that the partnership is well positioned to
manage through near-term challenges and to grow meaningfully in the
intermediate and long-term as industry conditions improve.
“The $1.6 billion of proceeds from our recent preferred equity
placement satisfies PAA’s equity financing needs for 2016 and
substantially all of 2017 and enables PAA to complete its
multi-year, multi-billion dollar capital expansion program, while
maintaining substantial liquidity and a solid balance sheet.”
Armstrong continued, “PAA has visibility for incremental cash
flow contributions over the next 24 months from the completion of
these projects, the majority of which are backed by minimum volume
commitments and other contractual support. These projects enhance
PAA’s existing footprint and provide further significant leverage
to a sustained increase in U.S. production levels with little to no
incremental investment.”
The following table summarizes selected PAA financial
information by segment for the fourth quarter and full year of
2015:
Summary of
Selected Financial Data by Segment (1)
(unaudited)
(in millions)
Three Months Ended Three
Months Ended December 31, 2015 December 31, 2014
Transportation Facilities
Supply and
Logistics
Transportation Facilities
Supply and
Logistics
Reported segment profit $ 236 $ 147 $ 123 $ 267 $ 149 $ 249
Selected items impacting comparability of segment profit (2)
20 3 34 3 2
(76 )
Adjusted segment profit $ 256
$ 150 $ 157 $
270 $ 151 $ 173
Percentage change in adjusted segment profit versus 2014
period (5 )% (1 )%
(9 )% Twelve Months Ended
Twelve Months Ended December 31, 2015 December 31,
2014 Transportation Facilities
Supply and
Logistics
Transportation Facilities
Supply and
Logistics
Reported segment profit $ 917 $ 579 $ 381 $ 925 $ 584 $ 782
Selected items impacting comparability of segment profit (2)
94 9 187 25 13
(131 )
Adjusted segment profit $ 1,011
$ 588 $ 568
$ 950 $ 597 $ 651
Percentage change in adjusted segment profit versus 2014
period 6 % (2 )%
(13 )%
(1)
PAA’s reported results include the impact
of items that affect comparability between reporting periods. The
impact of certain of these items is excluded from adjusted results.
See the section of this release entitled "Non-GAAP Financial
Measures and Selected Items Impacting Comparability" and the tables
attached hereto for information regarding certain selected items
that PAA believes impact comparability of financial results between
reporting periods.
(2)
Certain of our non-GAAP financial measures
may not be impacted by each of the selected items impacting
comparability.
Fourth-quarter 2015 Transportation adjusted segment profit
decreased 5% versus comparable 2014 results. This decrease was
primarily driven by lower pipeline loss allowance revenue due to a
lower realized average price per barrel during fourth-quarter 2015,
partially offset by higher equity earnings from our 50% interest in
the BridgeTex pipeline.
Fourth-quarter 2015 Facilities adjusted segment profit decreased
1% versus comparable 2014 results. This decrease was primarily due
to lower revenues associated with our rail and natural gas storage
activities, partially offset by increased storage revenue at our
west coast terminals.
Fourth-quarter 2015 Supply and Logistics adjusted segment profit
decreased by 9% relative to comparable 2014 results. This decrease
was primarily driven by lower volumes and margins associated with
our crude oil lease gathering due to less favorable market
conditions as a result of increased competition. This decrease was
partially offset by increased margins on NGL sales.
Plains GP Holdings
PAGP’s sole assets are its ownership interest in PAA’s general
partner and incentive distribution rights. As the control entity of
PAA, PAGP consolidates PAA’s results into its financial statements,
which is reflected in the condensed consolidating balance sheet and
income statement included at the end of this release. Information
regarding PAGP’s distributions is reflected below:
Q4 2015
Q3 2015 Q4 2014 Distribution per Class A share
declared for the period $ 0.231 $ 0.231 $ 0.203
Q4 2015
distribution percentage growth from prior periods -%
13.8%
Conference Call
PAA and PAGP will hold a conference call on February 9, 2016
(see details below). Prior to this conference call, PAA will
furnish a current report on Form 8-K, which will include
material in this news release as well as PAA’s financial and
operational guidance for the first quarter and full year of 2016. A
copy of the Form 8-K will be available at
www.plainsallamerican.com, where PAA and PAGP routinely post
important information.
The PAA and PAGP conference call will be held at 11:00 a.m. ET
on Tuesday, February 9, 2016 to discuss the following items:
1. PAA's fourth-quarter and full-year 2015
performance;
2. The status of major expansion
projects;
3. Capitalization and liquidity;
4. Financial and operating guidance for the
first quarter and full year of 2016; and
5. PAA’s and PAGP's outlook for the
future.
Conference Call Access Instructions
To access the Internet webcast of the conference call, please go
to www.plainsallamerican.com, under the “Investor Relations”
section of the website (Navigate to: Investor Relations / either
“PAA” or “PAGP” / News & Events / Quarterly Earnings).
Following the live webcast, the call will be archived for a period
of sixty (60) days on the website.
Alternatively, access to the live conference call is available
by dialing toll free (800) 230-1092. International callers should
dial (612) 288-0329. No password is required. The slide
presentation accompanying the conference call will be available a
few minutes prior to the call under the “Events and Presentations”
tab of the PAA and PAGP Investor Relations sections of the above
referenced website.
Telephonic Replay Instructions
To listen to a telephonic replay of the conference call, please
dial (800) 475-6701, or (320) 365-3844 for international callers,
and enter replay access code 383078. The replay will be available
beginning Tuesday, February 9, 2016, at approximately
1:00 p.m. ET and will continue until 11:59 p.m. ET on March 9,
2016.
Non-GAAP Financial Measures and Selected Items Impacting
Comparability
To supplement our financial information presented in accordance
with GAAP, management uses additional measures that are known as
“non-GAAP financial measures” (such as adjusted EBITDA and implied
distributable cash flow (“DCF”)) in its evaluation of past
performance and prospects for the future. Management believes that
the presentation of such additional financial measures provides
useful information to investors regarding our performance and
results of operations because these measures, when used in
conjunction with related GAAP financial measures, (i) provide
additional information about our core operating performance and
ability to generate and distribute cash flow, (ii) provide
investors with the financial analytical framework upon which
management bases financial, operational, compensation and planning
decisions and (iii) present measurements that investors, rating
agencies and debt holders have indicated are useful in assessing us
and our results of operations. These measures may exclude, for
example, (i) charges for obligations that are expected to be
settled with the issuance of equity instruments, (ii) the
mark-to-market of derivative instruments that are related to
underlying activities in another period (or the reversal of such
adjustments from a prior period), gains and losses on derivatives
that are related to investing activities (such as the purchase of
linefill) and inventory valuation adjustments, as applicable, (iii)
long-term inventory costing adjustments, (iv) items that are not
indicative of our core operating results and business outlook
and/or (v) other items that we believe should be excluded in
understanding our core operating performance. We have defined all
such items as “Selected Items Impacting Comparability.” We consider
an understanding of these selected items impacting comparability to
be material to the evaluation of our operating results and
prospects.
Although we present selected items that we consider in
evaluating our performance, you should also be aware that the items
presented do not represent all items that affect comparability
between the periods presented. Variations in our operating results
are also caused by changes in volumes, prices, exchange rates,
mechanical interruptions, acquisitions and numerous other factors.
These types of variations are not separately identified in this
release, but will be discussed, as applicable, in management’s
discussion and analysis of operating results in our Annual Report
on Form 10-K.
Adjusted EBITDA and other non-GAAP financial measures are
reconciled to the most comparable measures as reported in
accordance with GAAP for the periods presented in the tables
attached to this release, and should be viewed in addition to, and
not in lieu of, our Consolidated Financial Statements and notes
thereto. In addition, PAA maintains on its website
(www.plainsallamerican.com) a reconciliation of adjusted EBITDA and
certain commonly used non-GAAP financial information to the most
comparable GAAP measures. To access the information, investors
should click on “PAA” under the "Investor Relations" tab on the
home page, select the "Financial Information" tab and navigate to
the “Non-GAAP Reconciliations” link.
Forward Looking Statements
Except for the historical information contained herein, the
matters discussed in this release consist of forward-looking
statements that involve certain risks and uncertainties that could
cause actual results or outcomes to differ materially from results
or outcomes anticipated in the forward-looking statements. These
risks and uncertainties include, among other things, declines in
the volume of crude oil, refined product and NGL shipped,
processed, purchased, stored, fractionated and/or gathered at or
through the use of our assets, whether due to declines in
production from existing oil and gas reserves, failure to develop
or slowdown in the development of additional oil and gas reserves,
whether from reduced cash flow to fund drilling or the inability to
access capital, or other factors; the effects of competition;
failure to implement or capitalize, or delays in implementing or
capitalizing, on expansion projects; unanticipated changes in crude
oil market structure, grade differentials and volatility (or lack
thereof); environmental liabilities or events that are not covered
by an indemnity, insurance or existing reserves; fluctuations in
refinery capacity in areas supplied by our mainlines and other
factors affecting demand for various grades of crude oil, refined
products and natural gas and resulting changes in pricing
conditions or transportation throughput requirements; the
occurrence of a natural disaster, catastrophe, terrorist attack or
other event, including attacks on our electronic and computer
systems; tightened capital markets or other factors that increase
our cost of capital or limit our ability to obtain debt or equity
financing on satisfactory terms to fund additional acquisitions,
expansion projects, working capital requirements and the repayment
or refinancing of indebtedness; the currency exchange rate of the
Canadian dollar; continued creditworthiness of, and performance by,
our counterparties, including financial institutions and trading
companies with which we do business; maintenance of our credit
rating and ability to receive open credit from our suppliers and
trade counterparties; non-utilization of our assets and facilities;
weather interference with business operations or project
construction, including the impact of extreme weather events or
conditions; the availability of, and our ability to consummate,
acquisition or combination opportunities; the successful
integration and future performance of acquired assets or businesses
and the risks associated with operating in lines of business that
are distinct and separate from our historical operations; increased
costs, or lack of availability, of insurance; the effectiveness of
our risk management activities; shortages or cost increases of
supplies, materials or labor; the impact of current and future
laws, rulings, governmental regulations, accounting standards and
statements and related interpretations; fluctuations in the debt
and equity markets, including the price of our units at the time of
vesting under our long-term incentive plans; risks related to the
development and operation of our assets, including our ability to
satisfy our contractual obligations to our customers; inability to
recognize current revenue attributable to deficiency payments
received from customers who fail to ship or move more than minimum
contracted volumes until the related credits expire or are used;
factors affecting demand for natural gas and natural gas storage
services and rates; general economic, market or business conditions
and the amplification of other risks caused by volatile financial
markets, capital constraints and pervasive liquidity concerns; and
other factors and uncertainties inherent in the transportation,
storage, terminalling and marketing of crude oil and refined
products, as well as in the storage of natural gas and the
processing, transportation, fractionation, storage and marketing of
natural gas liquids as discussed in the Partnerships' filings with
the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil,
natural gas liquids ("NGL"), natural gas and refined products. PAA
owns an extensive network of pipeline transportation, terminalling,
storage and gathering assets in key crude oil and NGL producing
basins and transportation corridors and at major market hubs in the
United States and Canada. On average, PAA handles over 4.4 million
barrels per day of crude oil and NGL in its Transportation segment.
PAA is headquartered in Houston, Texas.
Plains GP Holdings is a publicly traded entity that owns an
interest in the general partner and incentive distribution rights
of Plains All American Pipeline, L.P., one of the largest energy
infrastructure and logistics companies in North America. PAGP is
headquartered in Houston, Texas.
PLAINS ALL AMERICAN PIPELINE, L.P. AND
SUBSIDIARIESFINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in millions, except per unit data)
Three Months
Ended Twelve Months Ended December 31,
December 31, 2015 2014 2015 2014
REVENUES $ 4,996 $ 9,459 $ 23,152 $ 43,464
COSTS AND EXPENSES Purchases and related costs 4,135 8,384
19,726 39,500 Field operating costs 343 378 1,454 1,456 General and
administrative expenses 61 67 278 325 Depreciation and amortization
113 98 432 384
Total costs and expenses 4,652 8,927 21,890 41,665
OPERATING INCOME 344 532 1,262 1,799
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 49
35 183 108 Interest expense, net (111 ) (95 ) (432 ) (348 ) Other
expense, net - (1 ) (7 ) (2 )
INCOME BEFORE TAX 282 471 1,006 1,557 Current income
tax expense (12 ) (9 ) (84 ) (71 ) Deferred income tax expense
(22 ) (72 ) (16 ) (100 )
NET
INCOME 248 390 906 1,386 Net income attributable to
noncontrolling interests (1 ) (1 ) (3 )
(2 )
NET INCOME ATTRIBUTABLE TO PAA $ 247 $ 389
$ 903 $ 1,384
NET INCOME PER COMMON
UNIT: NET INCOME ATTRIBUTABLE TO COMMON
UNITHOLDERS $ 95 $ 251 $ 305 $ 878
BASIC NET INCOME PER COMMON UNIT $ 0.24 $ 0.67
$ 0.78 $ 2.39
DILUTED NET INCOME PER
COMMON UNIT $ 0.24 $ 0.67 $ 0.77 $ 2.38
BASIC WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING 398 373 394
367
DILUTED WEIGHTED AVERAGE COMMON
UNITS OUTSTANDING 399 375
396 369
(1)
The 2014 periods have been retroactively
adjusted to reflect the reclassification of the amortization of
debt issuance costs from "Depreciation and amortization" to
"Interest expense, net" as a result of our adoption of revised debt
issuance costs guidance issued by the FASB.
ADJUSTED
RESULTS
(in millions, except per unit data)
Three Months Ended
Twelve Months Ended December 31, December 31,
2015 2014 2015 2014 ADJUSTED
NET INCOME ATTRIBUTABLE TO PAA $ 304 $ 362 $
1,191 $ 1,347
DILUTED ADJUSTED NET INCOME
PER COMMON UNIT $ 0.38 $ 0.60 $ 1.48 $
2.28
ADJUSTED EBITDA $ 563 $ 594
$ 2,168 $ 2,200
PLAINS ALL AMERICAN
PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY
(unaudited)
CONDENSED
CONSOLIDATED BALANCE SHEET DATA (1)
(in millions)
December 31, December 31, 2015
2014 ASSETS Current assets $ 2,969 $ 4,179 Property
and equipment, net 13,474 12,272 Goodwill 2,405 2,465 Investments
in unconsolidated entities 2,027 1,735 Linefill and base gas 898
930 Long-term inventory 129 186 Other long-term assets, net 386 431
Total assets $ 22,288 $ 22,198
LIABILITIES AND PARTNERS'
CAPITAL Current liabilities $ 3,407 $ 4,755 Senior notes, net
of unamortized discounts and debt issuance costs 9,698 8,699 Other
long-term debt 677 5 Other long-term liabilities and deferred
credits 567 548 Total liabilities 14,349 14,007 Partners'
capital excluding noncontrolling interests 7,881 8,133
Noncontrolling interests 58 58 Total partners' capital 7,939 8,191
Total liabilities and partners' capital $ 22,288 $ 22,198
DEBT
CAPITALIZATION RATIOS (1)
(in millions)
December 31, December 31, 2015
2014 Short-term debt $ 999 $ 1,287 Long-term debt 10,375
8,704 Total debt $ 11,374 $ 9,991 Long-term debt $ 10,375 $
8,704 Partners' capital 7,939 8,191 Total book capitalization $
18,314 $ 16,895 Total book capitalization, including short-term
debt $ 19,313 $ 18,182 Long-term debt-to-total book
capitalization 57% 52% Total debt-to-total book capitalization,
including short-term debt 59% 55% (1) The 2014 period
has been retroactively adjusted to reflect the reclassification of
certain debt issuance costs from "Other long-term assets, net" to
"Senior notes, net of unamortized discounts and debt issuance
costs" as a result of our adoption of revised debt issuance costs
guidance issued by the FASB.
PLAINS ALL AMERICAN PIPELINE, L.P. AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
SELECTED
FINANCIAL DATA BY SEGMENT
(in millions)
Three Months EndedDecember 31, 2015
Three Months EndedDecember 31, 2014 Supply and
Supply and Transportation Facilities
Logistics Transportation Facilities
Logistics Revenues (1) $ 391 $ 261 $ 4,706 $ 433 $ 270 $
9,129 Purchases and related costs (1) (23 ) (7 ) (4,464 ) (35 ) (8
) (8,711 ) Field operating costs (1) (2) (159 ) (94 ) (94 ) (142 )
(97 ) (141 ) Equity-indexed compensation (expense)/benefit -
operations - 1 - (1 ) - - Segment general and administrative
expenses (2) (3) (22 ) (14 ) (24 ) (20 ) (14 ) (26 ) Equity-indexed
compensation expense - general and administrative - - (1 ) (3 ) (2
) (2 ) Equity earnings in unconsolidated entities 49
- - 35 -
- Reported segment profit $ 236 $ 147 $ 123 267 149
249 Selected items impacting comparability of segment profit (4)
20 3 34 3
2 (76 ) Adjusted segment profit $ 256 $
150 $ 157 $ 270 $ 151 $ 173
Maintenance capital $ 43 $ 20 $ 3 $ 54
$ 17 $ 2
Twelve Months
EndedDecember 31, 2015 Twelve Months
EndedDecember 31, 2014 Supply and Supply
and Transportation Facilities Logistics
Transportation Facilities Logistics Revenues
(1) $ 1,594 $ 1,050 $ 21,945 $ 1,655 $ 1,127 $ 42,150 Purchases and
related costs (1) (108 ) (24 ) (21,018 ) (151 ) (55 ) (40,752 )
Field operating costs (1) (2) (652 ) (377 ) (433 ) (560 ) (404 )
(481 ) Equity-indexed compensation expense - operations (5 ) - -
(15 ) (4 ) (2 ) Segment general and administrative expenses (2) (3)
(89 ) (65 ) (102 ) (83 ) (60 ) (105 ) Equity-indexed compensation
expense - general and administrative (6 ) (5 ) (11 ) (29 ) (20 )
(28 ) Equity earnings in unconsolidated entities 183
- - 108 -
- Reported segment profit $ 917 $ 579 $ 381 $ 925 $
584 $ 782 Selected items impacting comparability of segment profit
(4) 94 9 187 25
13 (131 ) Adjusted segment profit $
1,011 $ 588 $ 568 $ 950 $ 597 $
651 Maintenance capital $ 144 $ 68 $ 8
$ 165 $ 52 $ 7
(1)
Includes intersegment amounts.
(2)
Field operating costs and Segment general
and administrative expenses exclude equity-indexed compensation
expense, which is presented separately in the table above.
(3)
Segment general and administrative
expenses reflect direct costs attributable to each segment and an
allocation of other expenses to the segments. The proportional
allocations by segment require judgment by management and are based
on the business activities that exist during each period.
(4)
Certain of our non-GAAP financial measures
may not be impacted by each of the selected items impacting
comparability.
PLAINS ALL AMERICAN PIPELINE, L.P.
AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
OPERATING
DATA (1)
Three Months Ended Twelve Months Ended December
31, December 31, 2015 2014 2015
2014 Transportation segment (average daily volumes
in thousands of barrels per day): Volumes from tariff
activities Crude oil pipelines (by region): Permian Basin (2) 1,963
1,552 1,849 1,512 South Texas / Eagle Ford (2) 331 262 306 227
Western 190 265 215 260 Rocky Mountain (2) 433 460 440 426 Gulf
Coast 537 587 532 492 Central 362 457 413 450 Canada 377 419 392
399 Crude oil pipelines 4,193 4,002 4,147 3,766 NGL pipelines 189
190 193 186 Total volumes from tariff activities 4,382 4,192 4,340
3,952 Trucking 109 122 113 127 Total Transportation segment volumes
4,491 4,314 4,453 4,079
Facilities segment (average
monthly volumes): Crude oil, refined products and NGL
terminalling and storage (average monthly capacity in millions of
barrels) 103 95 100 95 Rail load / unload volumes (average volumes
in thousands of barrels per day) 172 229 210 231 Natural gas
storage (average monthly working capacity in billions of cubic
feet) 97 97 97 97 NGL fractionation (average volumes in thousands
of barrels per day) 111 103 103 96 Total Facilities segment volumes
(average monthly volumes in millions of barrels) ((3)) 128 122 126
121
Supply and Logistics segment (average daily volumes
in thousands of barrels per day): Crude oil lease gathering
purchases 899 999 943 949 NGL sales 266 268 223 208 Waterborne
cargos 2 - 2 - Total Supply and Logistics segment volumes 1,167
1,267 1,168 1,157
(1)
Average volumes are calculated as total
volumes for the period (attributable to our interest) divided by
the number of days or months in the period.
(2)
Area systems include volumes (attributable
to our interest) from pipelines owned by unconsolidated
entities.
(3)
Facilities segment total is calculated as
the sum of: (i) crude oil, refined products and NGL terminalling
and storage capacity; (ii) rail load and unload volumes multiplied
by the number of days in the period and divided by the number of
months in the period; (iii) natural gas storage working capacity
divided by 6 to account for the 6:1 mcf of natural gas to crude Btu
equivalent ratio and further divided by 1,000 to convert to monthly
volumes in millions; and (iv) NGL fractionation volumes multiplied
by the number of days in the period and divided by the number of
months in the period.
PLAINS ALL AMERICAN PIPELINE,
L.P. AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
COMPUTATION OF
BASIC AND DILUTED NET INCOME PER COMMON UNIT
(in millions, except per unit data)
Three Months Ended
Twelve Months Ended December 31, December 31,
2015 2014 2015 2014 Basic Net Income
per Common Unit Net income attributable to PAA $ 247 $ 389 $
903 $ 1,384 Less: Distributions to general partner (1) (155 ) (136
) (608 ) (502 ) Less: Distributions to participating securities (1)
(1 ) (2 ) (6 ) (6 ) Less: Undistributed (earnings)/loss allocated
to general partner and participating securities (1) 4
- 16 2 Net income
attributable to common unitholders in accordance with application
of the two-class method for MLPs $ 95 $ 251 $ 305
$ 878 Basic weighted average common units
outstanding 398 373 394 367 Basic net income per common unit
$ 0.24 $ 0.67 $ 0.78 $ 2.39
Diluted Net Income per Common Unit Net income attributable
to PAA $ 247 $ 389 $ 903 $ 1,384 Less: Distributions to general
partner (1) (155 ) (136 ) (608 ) (502 ) Less: Distributions to
participating securities (1) (1 ) (2 ) (6 ) (6 ) Less:
Undistributed (earnings)/loss allocated to general partner and
participating securities (1) 4 -
16 2 Net income attributable to common
unitholders in accordance with application of the two-class method
for MLPs $ 95 $ 251 $ 305 $ 878
Basic weighted average common units outstanding 398 373 394 367
Effect of dilutive securities: Weighted average LTIP units (2)
1 2 2 2
Diluted weighted average common units outstanding 399
375 396 369
Diluted net income per common unit $ 0.24 $ 0.67 $
0.77 $ 2.38
(1)
We calculate net income attributable to
common unitholders based on the distributions pertaining to the
current period’s net income. After adjusting for the appropriate
period's distributions, the remaining undistributed earnings or
excess distributions over earnings, if any, are allocated to the
general partner, common unitholders and participating securities in
accordance with the contractual terms of the partnership agreement
and as further prescribed under the two-class method.
(2)
Our Long-term Incentive Plan ("LTIP")
awards that contemplate the issuance of common units are considered
dilutive unless (i) vesting occurs only upon the satisfaction of a
performance condition and (ii) that performance condition has yet
to be satisfied. LTIP awards that are deemed to be dilutive are
reduced by a hypothetical unit repurchase based on the remaining
unamortized fair value, as prescribed by the treasury stock method
in guidance issued by the FASB.
PLAINS ALL AMERICAN
PIPELINE, L.P. AND SUBSIDIARIES FINANCIAL SUMMARY
(unaudited)
SELECTED ITEMS
IMPACTING COMPARABILITY
(in millions, except per unit data)
Three Months Ended
Twelve Months Ended December 31, December 31,
2015 2014
2015 2014 Selected Items
Impacting Comparability - Income/(Loss) (1):
Gains/(losses) from derivative activities net of inventory
valuation adjustments (2) $ 2 $ 166 $ (110 ) $ 243 Long-term
inventory costing adjustments (3) (37 ) (85 ) (99 ) (85 ) Line 901
incident (18 ) - (83 ) - Equity-indexed compensation expense (4) (5
) (8 ) (27 ) (56 ) Deferred income tax expense (5) - - (22 ) - Net
gain/(loss) on foreign currency revaluation 1 (3 ) 21 (13 ) Tax
effect on selected items impacting comparability -
(43 ) 32 (52 ) Selected items impacting
comparability of net income attributable to PAA $ (57 ) $ 27
$ (288 ) $ 37 Impact to basic net income per common
unit $ (0.14 ) $ 0.07 $ (0.71 ) $ 0.10 Impact to
diluted net income per common unit $ (0.14 ) $ 0.07 $ (0.71
) $ 0.10
(1)
Certain of our non-GAAP financial measures
may not be impacted by each of the selected items impacting
comparability.
(2)
Includes mark-to-market and other gains
and losses resulting from derivative instruments that are related
to underlying activities in another period (or the reversal of
mark-to-market gains and losses from a prior period), gains and
losses on derivatives that are related to investing activities
(such as the purchase of linefill) and inventory valuation
adjustments, as applicable.
(3)
Includes the impact of changes in the
average cost of long-term inventory that result from fluctuations
in market prices and writedowns of such inventory that result from
price declines. Long-term inventory consists of minimum working
inventory requirements in third-party assets and other working
inventory needed for our commercial operations. We consider this
inventory necessary to conduct our operations and we intend to
carry this inventory for the foreseeable future. Therefore, we
classify this inventory as long-term on our balance sheet and do
not hedge the inventory with derivative instruments (similar to
linefill in our own assets).
(4)
Includes equity-indexed compensation
expense associated with LTIP awards that will or may be settled in
units, as the dilutive impact of these outstanding awards is
included in our diluted net income per unit calculation and the
majority of these awards are expected to be settled in units.
(5)
Includes the initial cumulative effect of
the recent change in Canadian tax legislation.
PLAINS ALL AMERICAN
PIPELINE, L.P. AND SUBSIDIARIES FINANCIAL SUMMARY
(unaudited)
COMPUTATION OF
ADJUSTED BASIC AND DILUTED NET INCOME PER COMMON
UNIT
(in millions, except per unit data)
Three Months Ended
Twelve Months Ended December 31, December 31,
2015 2014
2015 2014 Basic Adjusted Net
Income per Common Unit Net income attributable to PAA $ 247 $
389 $ 903 $ 1,384 Selected items impacting comparability of net
income attributable to PAA (1) 57 (27 )
288 (37 ) Adjusted net income attributable to PAA 304
362 1,191 1,347 Less: Distributions to general partner (2) (155 )
(136 ) (608 ) (502 ) Less: Distributions to participating
securities (2) (1 ) (2 ) (6 ) (6 ) Less: Undistributed
(earnings)/loss allocated to general partner and participating
securities (2) 3 1 11
3 Adjusted net income attributable to common
unitholders in accordance with application of the two-class method
for MLPs $ 151 $ 225 $ 588 $ 842
Basic weighted average common units outstanding 398 373 394 367
Basic adjusted net income per common unit $ 0.38 $
0.60 $ 1.49 $ 2.29
Diluted Adjusted
Net Income per Common Unit Net income attributable to PAA $ 247
$ 389 $ 903 $ 1,384 Selected items impacting comparability of net
income attributable to PAA (1) 57 (27 )
288 (37 ) Adjusted net income attributable to PAA 304
362 1,191 1,347 Less: Distributions to general partner (2) (155 )
(136 ) (608 ) (502 ) Less: Distributions to participating
securities (2) (1 ) (2 ) (6 ) (6 ) Less: Undistributed
(earnings)/loss allocated to general partner and participating
securities (2) 3 1 11
3 Adjusted net income attributable to common
unitholders in accordance with application of the two-class method
for MLPs $ 151 $ 225 $ 588 $ 842
Diluted weighted average common units outstanding 399 375 396 369
Diluted adjusted net income per common unit $ 0.38 $
0.60 $ 1.48 $ 2.28
(1)
Certain of our non-GAAP financial measures
may not be impacted by each of the selected items impacting
comparability.
(2)
We calculate adjusted net income
attributable to common unitholders based on the distributions
pertaining to the current period’s net income. After adjusting for
the appropriate period's distributions, the remaining undistributed
earnings or excess distributions over earnings, if any, are
allocated to the general partner, common unitholders and
participating securities in accordance with the contractual terms
of the partnership agreement and as further prescribed under the
two-class method.
PLAINS ALL AMERICAN PIPELINE, L.P. AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
FINANCIAL DATA
RECONCILIATIONS
(in millions)
Three Months Ended Twelve Months Ended
December 31, December 31, 2015 2014
2015 2014 Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") and
Excluding Selected Items Impacting
Comparability ("Adjusted EBITDA") Reconciliations
Net Income $ 248 $ 390 $ 906 $ 1,386 Add: Interest expense, net 111
95 432 348 Add: Income tax expense 34 81 100 171 Add: Depreciation
and amortization 113 98 432
384 EBITDA $ 506 $ 664 $ 1,870 $ 2,289
Selected items impacting comparability of EBITDA (1) 57
(70 ) 298 (89 ) Adjusted EBITDA
$ 563 $ 594 $ 2,168 $ 2,200
(1)
Certain of our non-GAAP financial measures
may not be impacted by each of the selected items impacting
comparability.
Three Months Ended Twelve Months Ended
December 31, December 31, 2015 2014
2015 2014 Adjusted EBITDA to Implied Distributable
Cash Flow ("DCF") Reconciliation Adjusted EBITDA $ 563 $ 594 $
2,168 $ 2,200 Interest expense (1) (107 ) (92 ) (417 ) (334 )
Maintenance capital (66 ) (73 ) (220 ) (224 ) Current income tax
expense (12 ) (9 ) (84 ) (71 ) Equity earnings in unconsolidated
entities, net of distributions 6 (4 ) 31 (3 ) Distributions to
noncontrolling interests (2) (1 ) (1 ) (4 )
(3 ) Implied DCF (3) $ 383 $ 415 $ 1,474
$ 1,565
(1)
Excludes certain non-cash items impacting
interest expense such as amortization of debt issuance costs and
terminated interest rate swaps.
(2)
Includes distributions that pertain to the
current period's net income, which are paid in the subsequent
period.
(3)
Including costs related to our Line 901
incident that occurred during May 2015, Implied DCF would have been
$365 million and $1,391 million for the three and twelve months
ended December 31, 2015, respectively.
Three Months Ended Twelve Months Ended
December 31, December 31, 2015 2014
2015 2014 Net Cash Provided by Operating
Activities Reconciliation EBITDA $ 506 $ 664 $ 1,870 $ 2,289
Current income tax expense (12 ) (9 ) (84 ) (71 ) Interest expense,
net (111 ) (95 ) (432 ) (348 ) Net change in assets and
liabilities, net of acquisitions (261 ) 158 (37 ) 36 Other items to
reconcile to net cash provided by operating activities:
Equity-indexed compensation expense - 8
27 98 Net cash provided by operating
activities $ 122 $ 726 $ 1,344 $ 2,004
PLAINS GP HOLDINGS AND SUBSIDIARIES FINANCIAL SUMMARY
(unaudited)
CONDENSED
CONSOLIDATING STATEMENTS OF OPERATIONS (1)
(in millions, except per share data)
Three Months
Ended Three Months Ended December 31, 2015
December 31, 2014 PAA Consolidating
Adjustments (2)
PAGP PAA Consolidating
Adjustments (2)
PAGP REVENUES $ 4,996 $ - $ 4,996 $ 9,459 $ -
$ 9,459
COSTS AND EXPENSES Purchases and related
costs 4,135 - 4,135 8,384 - 8,384 Field operating costs 343 - 343
378 - 378 General and administrative expenses 61 1 62 67 3 70
Depreciation and amortization 113 -
113 98 - 98
Total costs and expenses 4,652 1 4,653 8,927 3 8,930
OPERATING INCOME 344 (1 ) 343 532 (3 ) 529
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 49
- 49 35 - 35 Interest expense, net (111 ) (3 ) (114 ) (95 ) (3 )
(98 ) Other expense, net - - -
(1 ) - (1 )
INCOME
BEFORE TAX 282 (4 ) 278 471 (6 ) 465 Current income tax expense
(12 ) - (12 ) (9 ) - (9 ) Deferred income tax expense (22 )
(28 ) (50 ) (72 ) (14 ) (86 )
NET INCOME 248 (32 ) 216 390 (20 ) 370 Net income
attributable to noncontrolling interests (1 ) (190 )
(191 ) (1 ) (345 ) (346 )
NET INCOME
ATTRIBUTABLE TO PAGP $ 247 $ (222 ) $ 25 $ 389
$ (365 ) $ 24
BASIC NET INCOME PER
CLASS A SHARE $ 0.11 $ 0.14
DILUTED NET
INCOME PER CLASS A SHARE $ 0.11 $ 0.13
BASIC WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING 228
172
DILUTED WEIGHTED AVERAGE CLASS A
SHARES OUTSTANDING 228 650
(1)
The 2014 periods have been retroactively
adjusted to reflect the reclassification of the amortization of
debt issuance costs from "Depreciation and amortization" to
"Interest expense, net" as a result of our adoption of revised debt
issuance costs guidance issued by the FASB.
(2)
Represents the aggregate consolidating
adjustments necessary to produce consolidated financial statements
for PAGP.
PLAINS GP HOLDINGS AND SUBSIDIARIES FINANCIAL SUMMARY
(unaudited)
CONDENSED
CONSOLIDATING STATEMENTS OF OPERATIONS (1)
(in millions, except per share data)
Twelve Months
Ended Twelve Months Ended December 31, 2015
December 31, 2014 PAA Consolidating
Adjustments (2)
PAGP PAA Consolidating
Adjustments (2)
PAGP REVENUES $ 23,152 $ - $ 23,152 $ 43,464 $
- $ 43,464
COSTS AND EXPENSES Purchases and related
costs 19,726 - 19,726 39,500 - 39,500 Field operating costs 1,454 -
1,454 1,456 - 1,456 General and administrative expenses 278 3 281
325 6 331 Depreciation and amortization 432 1
433 384 2
386 Total costs and expenses 21,890 4 21,894 41,665 8 41,673
OPERATING INCOME 1,262 (4 ) 1,258 1,799 (8 ) 1,791
OTHER INCOME/(EXPENSE) Equity earnings in
unconsolidated entities 183 - 183 108 - 108 Interest expense, net
(432 ) (11 ) (443 ) (348 ) (9 ) (357 ) Other expense, net (7
) - (7 ) (2 ) - (2
)
INCOME BEFORE TAX 1,006 (15 ) 991 1,557 (17 ) 1,540
Current income tax expense (84 ) - (84 ) (71 ) - (71 ) Deferred
income tax expense (16 ) (82 ) (98 )
(100 ) (41 ) (141 )
NET INCOME 906 (97
) 809 1,386 (58 ) 1,328 Net income attributable to noncontrolling
interests (3 ) (688 ) (691 ) (2 )
(1,256 ) (1,258 )
NET INCOME ATTRIBUTABLE TO
PAGP $ 903 $ (785 ) $ 118 $ 1,384 $ (1,314
) $ 70
BASIC NET INCOME PER CLASS A
SHARE $ 0.53 $ 0.48
DILUTED NET INCOME
PER CLASS A SHARE $ 0.53 $ 0.47
BASIC
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING 222
145
DILUTED WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING 222 650
(1)
The 2014 periods have been retroactively
adjusted to reflect the reclassification of the amortization of
debt issuance costs from "Depreciation and amortization" to
"Interest expense, net" as a result of our adoption of revised debt
issuance costs guidance issued by the FASB.
(2)
Represents the aggregate consolidating
adjustments necessary to produce consolidated financial statements
for PAGP.
PLAINS GP HOLDINGS AND SUBSIDIARIES FINANCIAL SUMMARY
(unaudited)
CONDENSED
CONSOLIDATING BALANCE SHEET DATA (1)
(in millions)
December 31, 2015 December 31, 2014
PAA Consolidating
Adjustments (2)
PAGP PAA Consolidating
Adjustments (2)
PAGP ASSETS Current assets $ 2,969 $ 3 $ 2,972
$ 4,179 $ 2 $ 4,181 Property and equipment, net 13,474 19 13,493
12,272 20 12,292 Goodwill 2,405 - 2,405 2,465 - 2,465 Investments
in unconsolidated entities 2,027 - 2,027 1,735 - 1,735 Deferred tax
asset - 1,835 1,835 - 1,705 1,705 Linefill and base gas 898 - 898
930 - 930 Long-term inventory 129 - 129 186 - 186 Other long-term
assets, net 386 (3 ) 383 431 (2
) 429 Total assets $ 22,288 $ 1,854 $ 24,142 $ 22,198
$ 1,725 $ 23,923
LIABILITIES AND PARTNERS'
CAPITAL Current liabilities $ 3,407 $ 2 $ 3,409 $ 4,755 $ 1 $
4,756 Senior notes, net of unamortized discounts and debt issuance
costs 9,698 - 9,698 8,699 - 8,699 Other long-term debt, net of
unamortized debt issuance costs 677 557 1,234 5 534 539 Other
long-term liabilities and deferred credits 567 -
567 548 - 548 Total
liabilities 14,349 559 14,908 14,007 535 14,542 Partners'
capital excluding noncontrolling interests 7,881 (6,119 ) 1,762
8,133 (6,476 ) 1,657 Noncontrolling interests 58
7,414 7,472 58 7,666
7,724 Total partners' capital 7,939 1,295
9,234 8,191 1,190 9,381 Total
liabilities and partners' capital $ 22,288 $ 1,854 $ 24,142
$ 22,198 $ 1,725 $ 23,923
(1)
The 2014 period has been retroactively
adjusted to reflect the reclassification of certain debt issuance
costs from "Other long-term assets, net" to "Senior notes, net of
unamortized discounts and debt issuance costs" and "Other long-term
debt, net of unamortized debt issuance costs" as a result of our
adoption of revised debt issuance costs guidance issued by the
FASB.
(2)
Represents the aggregate consolidating
adjustments necessary to produce consolidated financial statements
for PAGP.
PLAINS GP HOLDINGS AND SUBSIDIARIES DISTRIBUTION
SUMMARY (unaudited)
Q4 2015 PAGP
DISTRIBUTION SUMMARY
(in millions, except per unit and per share data)
Q4
2015 (1) PAA Distribution/Common Unit $ 0.7000 GP
Distribution/Common Unit $ 0.3885 Total Distribution/Common
Unit $ 1.0885 PAA Common Units Outstanding at 1/29/16
398 Gross GP Distribution $ 160 Less: IDR Reduction
(5 ) Net Distribution from PAA to AAP (2) $ 155 Less: Debt Service
(3 ) Less: G&A Expense (1 ) Cash Available for
Distribution by AAP $ 151
Distributions to AAP
Partners Direct AAP Owners & AAP Management (63% economic
interest) $ 96 PAGP (37% economic interest) 55 Total
distributions to AAP Partners $ 151 Distribution to
PAGP Investors $ 55 PAGP Class A Shares Outstanding at
1/29/16 239 PAGP Distribution/Class A Share $ 0.231
(1)
Amounts may not recalculate due to
rounding.
(2)
Plains AAP, L.P. ("AAP") is the general
partner of PAA.
PLAINS GP
HOLDINGS AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
COMPUTATION OF
BASIC AND DILUTED NET INCOME PER CLASS A SHARE
(in millions, except per share data)
Three Months Ended
Twelve Months Ended December 31, December 31,
2015 2014 2015 2014 Basic Net Income
per Class A Share Net income attributable to PAGP $ 25 $ 24 $
118 $ 70 Basic weighted average Class A shares outstanding 228 172
222 145 Basic net income per Class A share $ 0.11 $ 0.14 $
0.53 $ 0.48
Diluted Net Income per Class A Share Net
income attributable to PAGP $ 25 $ 24 $ 118 $ 70 Incremental net
income attributable to PAGP resulting from assumed exchange of AAP
units and AAP Management Units - 58 -
235 Net income attributable to PAGP including incremental net
income from assumed exchange of AAP units and AAP Management Units
$ 25 $ 82 $ 118 $ 305 Basic weighted average Class A shares
outstanding 228 172 222 145 Dilutive shares resulting from assumed
exchange of AAP units and AAP Management Units - 478
- 505 Diluted weighted average Class A shares
outstanding 228 650 222 650
Diluted net income per Class A share $ 0.11 $ 0.13 $ 0.53 $ 0.47
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version on businesswire.com: http://www.businesswire.com/news/home/20160208006295/en/
Plains All American Pipeline, L.P. and Plains GP HoldingsRyan
Smith, (866) 809-1291Director, Investor RelationsorAl Swanson,
(800) 564-3036Executive Vice President, CFO
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