Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP
Holdings (NYSE: PAGP) today announced their quarterly distributions
with respect to the second quarter of 2016. The distributions will
be payable on August 12, 2016 to holders of record of each security
at the close of business on July 29, 2016.
PAA announced a quarterly cash distribution of $0.70 per common
unit ($2.80 per unit on an annualized basis), which is unchanged
from the quarterly distribution paid in May 2016. Additionally, PAA
announced a payment-in-kind (“PIK”) of the quarterly distribution
with respect to its Series A Preferred Units, which will result in
the issuance of an additional 1,237,765 Series A Preferred Units.
The PIK amount equates to a quarterly distribution of $0.525 per
Series A Preferred Unit or $2.10 annualized.
PAGP announced a quarterly cash distribution of $0.231 per Class
A share ($0.924 per Class A share on an annualized basis), which is
unchanged from the quarterly distribution paid in May 2016.
PAA also stated that it plans to release second-quarter earnings
and furnish financial guidance after market close on Tuesday,
August 2, 2016. PAA currently forecasts that its full year 2016
adjusted EBITDA guidance will be in line with the $2.175 billion
midpoint guidance furnished on May 4, 2016.
In a separate release today, PAA and PAGP announced the results
of its simplification process and related actions. In connection
with the simplification transaction (“Simplification Transaction”)
and effective with the third quarter distribution to be paid in
November, PAA intends to pay a quarterly distribution of $0.55 per
common unit ($2.20 per unit on an annualized basis). This equates
to a 21% reduction to the current quarterly payout per PAA common
unit. Giving effect to the Simplification Transaction, the pro
forma quarterly distribution payable to the holders of PAGP Class A
shares for the third quarter of 2016 will be $0.2065 per Class A
share ($0.8260 annually), representing an 11% reduction from the
current quarterly distribution per PAGP Class A share.
PAA will conduct a conference call on Tuesday, July 12, 2016 to
further discuss the Simplification Transaction, quarterly
distributions, PAA’s confirmation of its 2016 adjusted EBITDA
guidance and related matters. The conference call will be held at
8:30 a.m. ET (7:30 a.m. CT). Access to the live webcast is
available at either of the addresses below. Registering for the
webcast in advance is recommended.
www.plainsallamerican.com (Navigate to: Investor Relations/
either “PAA” or “PAGP”/ News & Events/ Conference Calls)
or
https://event.webcasts.com/starthere.jsp?ei=1089822
The slide presentation accompanying the conference call will be
posted a few minutes prior to the call at www.plainsallamerican.com
under the “Investor Relations” sections of the website (Navigate
to: Investor Relations/ either “PAA” or “PAGP”/ News & Events/
Conference Calls).
Additional Information and Where to Find It
The Simplification Transaction will be submitted to the
shareholders of PAGP for their consideration, and PAGP will file
with the SEC a proxy statement to be used by PAGP to solicit the
required approval of its shareholders in connection with the
Simplification Transaction. PAGP also plans to file other documents
with the SEC regarding the proposed Simplification Transaction.
INVESTORS AND SECURITY HOLDERS OF PAGP ARE URGED TO READ THE PROXY
STATEMENT AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
SIMPLIFICATION TRANSACTION. Security holders may obtain free copies
of the proxy statement and other documents containing important
information about PAGP, once such documents are filed with the SEC,
through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by PAGP will be
available free of charge on PAGP’s website at ir.pagp.com or by
contacting PAGP’s Investor Relations Department at (866)
809-1291.
Participants in the Solicitation
PAGP and the directors and executive officers of its general
partner (“PAGP GP”), and PAA and the directors and executive
officers of the general partner of the sole member of its general
partner, Plains All American GP LLC (”GP LLC”), may be deemed to be
“participants” in the solicitation of proxies from PAGP’s
shareholders in connection with the Simplification Transaction.
Information about the directors and executive officers of PAGP GP
is set forth in PAGP’s Annual Report on Form 10-K and information
about the directors and executive officers of GP LLC is set forth
in PAA’s Annual Report on Form 10-K, which were each filed with the
SEC on February 25, 2016, and PAGP’s and PAA’s subsequent Quarterly
Reports on Form 10-Q. These documents can be obtained free of
charge from the sources indicated above. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy statement
that PAGP intends to file with the SEC.
Non-GAAP Financial Measures
EBITDA and adjusted EBITDA are non-GAAP financial measures that
are most directly comparable to GAAP measures of net income and
cash flow from operating activities. PAA does not, however,
reconcile cash flows from operating activities to EBITDA or
adjusted EBITDA because such reconciliations are impractical for a
forecasted period. Adjusted EBITDA excludes selected items
impacting comparability, which are items that PAA management
believes should be excluded in understanding PAA’s core operating
performance. PAA’s Form 8-K furnished on May 4, 2016
presents a calculation of EBITDA and adjusted EBITDA, a
reconciliation of these non-GAAP measures to the most directly
comparable GAAP measures and further discussion regarding why PAA
management believes that the presentation of such financial
measures provides useful information to investors regarding
performance. A copy of PAA’s May 4th Form 8-K is
available on PAA’s website (www.plainsallamerican.com) under
“Investor Relations — Financial Information — Operating &
Financial Guidance,” or “Investor Relations — Financial Information
— SEC Filings.” In addition, PAA maintains a reconciliation of all
non-GAAP financial information, such as EBITDA and adjusted EBITDA,
to the most comparable GAAP measures under “Investor Relations —
Financial Information — Non-GAAP Reconciliations” section of its
website.
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; maintenance of our credit rating and ability to receive
open credit from our suppliers and trade counterparties; 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; 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; non-utilization of our
assets and facilities; increased costs, or lack of availability, of
insurance; 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; 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; 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 4.6 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.
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Plains All American Pipeline, L.P. and Plains GP HoldingsRyan
Smith, (866) 809-1291Director, Investor Relations
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