Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP
Holdings (NYSE: PAGP) today reported first-quarter 2014 results,
with PAA’s results exceeding the midpoint of its quarterly guidance
range. PAA’s first-quarter 2014 results reflect continued growth in
its fee-based Transportation and Facilities segments driven by
execution of PAA’s expansion capital program. These results also
include solid performance from PAA’s Supply and Logistics segment
as a result of constructive crude oil and NGL market conditions,
however, such conditions were not as favorable as those experienced
in the first quarter of 2013.
Plains All American Pipeline
Summary Financial
Information (1)
(in millions, except per unit data)
Three
Months Ended March 31, %
2014 2013 Change
Net income attributable to PAA $ 384 $ 528 -27 %
Diluted
net income per limited partner unit $ 0.73 $ 1.27 -43 %
EBITDA $ 607 $ 748 -19 %
Three Months
Ended March 31, % 2014 2013
Change Adjusted net income attributable to PAA $ 352
$ 524 -33 %
Diluted adjusted net income per limited partner
unit $ 0.65 $ 1.26 -48 %
Adjusted EBITDA $ 567 $ 739 -23
%
Distribution per unit declared for the period $ 0.6300 $
0.5750 9.6 %
(1)
The Partnership’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 the Partnership 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 GAAP measures.
“PAA reported first-quarter results that exceeded the midpoint
of our adjusted EBITDA guidance by over $40 million,” said Greg L.
Armstrong, Chairman and CEO of Plains All American. “Solid
performance from our crude oil and natural gas liquids activities
was partially offset by weather-related impacts in our natural gas
storage and crude oil rail activities.
PAA and PAGP are on track to achieve their respective
distribution growth objectives of 10% and 25% for 2014. PAA’s
quarterly distribution of $0.6300 per unit to be paid next week
represents a 9.6% increase over the comparable distribution paid in
May 2013, and PAGP’s quarterly distribution of $0.17055 per share
represents a 14.4% increase over the initial quarterly distribution
included in its October 2013 initial public offering (“IPO”)
prospectus. Importantly, we continue to execute on our expansion
capital program, which we believe will set the stage for continued,
attractive distribution growth beyond 2014.
Additionally, we are well positioned to not only fund our
ongoing capital programs, but also pursue acquisition-oriented
growth opportunities as we ended the first quarter with a strong
balance sheet, credit metrics favorable to our targets and $2.0
billion of committed liquidity.”
The following table summarizes selected PAA financial
information by segment for the first quarter of 2014:
Summary of
Selected Financial Data by Segment (1)
(in millions)
Three Months Ended
Three Months Ended March 31,
2014 March 31, 2013
Supply and
Supply and Transportation Facilities
Logistics Transportation Facilities
Logistics Reported segment profit $ 206 $ 154 $ 249 $ 164 $
150 $ 434
Selected items impacting the comparability
of segment profit (2)
7 5 (55 ) 11 6
(27 )
Adjusted segment profit $ 213
$ 159 $ 194
$ 175 $ 156 $ 407
Percentage change in adjusted segment profit versus 2013
period 22 % 2 %
-52 %
(1)
The Partnership’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 the Partnership 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.
First-quarter 2014 Transportation adjusted segment profit
increased 22% versus comparable 2013 results. This increase was
primarily driven by higher crude oil pipeline volumes associated
with recently completed organic growth projects and increased
producer drilling activities, partially offset by the sale of our
refined products pipelines in 2013.
First-quarter 2014 Facilities adjusted segment profit increased
2% over comparable 2013 results. This slight increase was primarily
due to increased profitability from our NGL fractionation and
natural gas processing activities, partially offset by
weather-related impacts in our natural gas storage operations.
First-quarter 2014 Supply and Logistics adjusted segment profit
exceeded the high end of our guidance, but decreased by
approximately 52% relative to comparable 2013 results. This
decrease was primarily a result of less favorable crude oil market
conditions in the first quarter of 2014 compared to the 2013 period
and reduced earnings from our natural gas storage commercial
optimization activities due to severe cold weather during the first
quarter of 2014.
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:
Summary Financial
Information
Distribution Q4 2013 provided in Q1
2014
(non-prorated) (1)
IPO prospectus Distribution per share for the period
$ 0.17055 $ 0.15979 $ 0.14904
Q1 2014 distribution
percentage growth over previous benchmarks 6.7 %
14.4 %
(1)
Reflects a full fourth quarter 2013
distribution per Class A share (before proration), assuming PAGP's
ownership in AAP at the date of record for the distribution for the
full fourth quarter of 2013.
Conference Call
PAA and PAGP will hold a conference call on May 8, 2014 (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 second quarter and full year of 2014. 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. EDT
on Thursday, May 8, 2014 to discuss the following items:
1. PAA's first-quarter 2014 performance;
2. The status of major expansion
projects;
3. Capitalization and liquidity;
4. Financial and operating guidance for the
second quarter and full year of 2014; 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, choose “Investor Relations,” and then
choose “Events and Presentations.” 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) 230-1059. International callers should
dial (612) 332-0107. 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”
portion of the “Investor Relations” section of the website at
www.plainsallamerican.com.
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 323381. The replay will be available
beginning Thursday, May 8, 2014, at approximately 1:00 p.m.
EDT and will continue until 11:59 p.m. EDT on June 8, 2014.
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) 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), (iii) items that are not
indicative of our core operating results and business outlook
and/or (iv) 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 Quarterly
Report on Form 10-Q.
Adjusted EBITDA and other non-GAAP financial measures are
reconciled to the most comparable GAAP measures 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 “Plains All American
Pipeline, L.P.” under the "Investor Relations" link on the home
page, select the "Guidance & Non-GAAP Reconciliations" link and
navigate to the “Non-GAAP Reconciliations” tab.
Forward Looking Statements
Except for the historical information contained herein, the
matters discussed in this release are forward-looking statements
that involve certain risks and uncertainties that could cause
actual results to differ materially from results anticipated in the
forward-looking statements. These risks and uncertainties include,
among other things, failure to implement or capitalize, or delays
in implementing or capitalizing, on planned internal growth
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; declines in the volumes of crude
oil, refined product and NGL shipped, processed, purchased, stored,
fractionated and/or gathered at or through the use of our
facilities, 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 or other factors; 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 access to capital; maintenance of
our credit rating and ability to receive open credit from our
suppliers and trade counterparties; continued creditworthiness of,
and performance by, our counterparties, including financial
institutions and trading companies with which we do business; the
currency exchange rate of the Canadian dollar; 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; weather interference with business
operations or project construction, including the impact of extreme
weather events or conditions; the effectiveness of our risk
management activities; shortages or cost increases of supplies,
materials or labor; 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 impact of current and future laws,
rulings, governmental regulations, accounting standards and
statements and related interpretations; non-utilization of our
assets and facilities; the effects of competition; increased costs
or lack of availability of insurance; 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 facilities, including our ability
to satisfy our contractual obligations to our customers at our
facilities; 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 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 3.5 million
barrels per day of crude oil and NGL on its pipelines. PAA is
headquartered in Houston, Texas.
Plains GP Holdings (NYSE: PAGP) 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 SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per unit data)
Three Months
Ended March 31, 2014 2013
REVENUES $ 11,684 $ 10,620
COSTS AND EXPENSES
Purchases and related costs 10,670 9,437 Field operating costs 336
340 General and administrative expenses 89 106 Depreciation and
amortization 96 82 Total costs and
expenses 11,191 9,965
OPERATING INCOME 493 655
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 20
11 Interest expense, net (78 ) (77 ) Other expense, net (2 )
-
INCOME BEFORE TAX 433 589 Current
income tax expense (36 ) (46 ) Deferred income tax expense
(12 ) (7 )
NET INCOME 385 536 Net income
attributable to noncontrolling interests (1 ) (8 )
NET INCOME ATTRIBUTABLE TO PAA $ 384 $ 528
NET INCOME ATTRIBUTABLE TO PAA: LIMITED
PARTNERS $ 268 $ 433
GENERAL PARTNER $ 116
$ 95
BASIC NET INCOME PER LIMITED PARTNER
UNIT $ 0.74 $ 1.28
DILUTED NET INCOME
PER LIMITED PARTNER UNIT $ 0.73 $ 1.27
BASIC WEIGHTED AVERAGE UNITS OUTSTANDING 360
336
DILUTED WEIGHTED AVERAGE UNITS
OUTSTANDING 363 339
ADJUSTED
RESULTS
(in millions, except per unit data)
Three Months Ended
March 31, 2014 2013 ADJUSTED NET
INCOME ATTRIBUTABLE TO PAA $ 352 $ 524
DILUTED ADJUSTED NET INCOME PER LIMITED PARTNER UNIT $ 0.65
$ 1.26
ADJUSTED EBITDA $ 567 $
739
PLAINS ALL AMERICAN PIPELINE, L.P. AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(in millions)
March 31, December 31, 2014
2013 ASSETS Current assets $ 4,932 $ 4,964 Property
and equipment, net 11,152 10,819 Goodwill 2,485 2,503 Linefill and
base gas 864 798 Long-term inventory 264 251 Investments in
unconsolidated entities 506 485 Other, net 499
540 Total assets $ 20,702 $ 20,360
LIABILITIES AND PARTNERS' CAPITAL Current liabilities $
5,554 $ 5,411 Senior notes, net of unamortized discount 6,711 6,710
Long-term debt under credit facilities and other 107 5 Other
long-term liabilities and deferred credits 547
531 Total liabilities 12,919 12,657 Partners' capital
excluding noncontrolling interests 7,724 7,644 Noncontrolling
interests 59 59 Total partners' capital
7,783 7,703 Total liabilities and
partners' capital $ 20,702 $ 20,360
DEBT
CAPITALIZATION RATIOS
(in millions)
March 31, December 31, 2014
2013 Short-term debt $ 879 $ 1,113 Long-term debt
6,818 6,715 Total debt $ 7,697 $ 7,828
Long-term debt $ 6,818 $ 6,715 Partners' capital
7,783 7,703 Total book capitalization $
14,601 $ 14,418 Total book capitalization, including
short-term debt $ 15,480 $ 15,531 Long-term
debt-to-total book capitalization 47 % 47 % Total debt-to-total
book capitalization, including short-term debt 50 % 50 %
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
SELECTED
FINANCIAL DATA BY SEGMENT
(in millions)
Three Months Ended Three Months Ended
March 31, 2014 March 31, 2013
Supply and
Supply and Transportation Facilities
Logistics Transportation Facilities
Logistics Revenues (1) $ 387 $ 299 $ 11,368 $ 368 $ 354 $
10,225 Purchases and related costs (1) (37 ) (26 ) (10,975 ) (35 )
(90 ) (9,636 ) Field operating costs (excluding equity-indexed
compensation expense) (1) (129 ) (97 ) (106 ) (131 ) (86 ) (115 )
Equity-indexed compensation expense - operations (4 ) (1 ) (1 ) (9
) (1 ) (1 ) Segment G&A expenses (excluding equity-indexed
compensation expense) (2) (22 ) (13 ) (26 ) (23 ) (17 ) (26 )
Equity-indexed compensation expense - general and administrative (9
) (8 ) (11 ) (17 ) (10 ) (13 ) Equity earnings in unconsolidated
entities 20 - - 11
- - Reported segment profit $
206 $ 154 $ 249 $ 164 $ 150 $ 434
Selected items impacting comparability of
segment profit (3)
7 5 (55 ) 11
6 (27 ) Adjusted segment profit $ 213 $
159 $ 194 $ 175 $ 156 $ 407
Maintenance capital $ 34 $ 10 $ 2 $ 32
$ 7 $ 5
(1)
Includes intersegment amounts.
(2)
Segment general and administrative
expenses (G&A) 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.
(3)
Certain 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)
Three Months Ended
March 31,
OPERATING
DATA (1)
2014 2013 Transportation activities
(average daily volumes in thousands of barrels): Tariff
activities Crude Oil Pipelines All American 33 40 Bakken Area
Systems 131 123 Basin / Mesa 745 725 Capline 126 156 Eagle Ford
Area Systems 189 48 Line 63 / Line 2000 125 118 Manito 45 47
Mid-Continent Area Systems 315 291 Permian Basin Area Systems 760
477 Rainbow 120 122 Rangeland 69 67 Salt Lake City Area Systems 131
135 South Saskatchewan 64 60 White Cliffs 23 22 Other 661 734 NGL
Pipelines Co-Ed 57 57 Other 116 207 Refined Products Pipelines -
101 Tariff activities total 3,710 3,530 Trucking 130 111
Transportation activities total 3,840 3,641
Facilities
activities (average monthly volumes): Crude oil, refined
products and NGL terminalling and storage (average monthly capacity
in millions of barrels) 95 94 Rail load / unload volumes (average
throughput in thousands of barrels per day) 229 216 Natural gas
storage (average monthly capacity in billions of cubic feet) 97 93
NGL fractionation (average throughput in thousands of barrels per
day) 92 100 Facilities activities total
(average monthly capacity in millions of
barrels)(2)
121 119
Supply and Logistics activities (average daily
volumes in thousands of barrels): Crude oil lease gathering
purchases 893 857 NGL sales 273 284 Waterborne cargos - 4 Supply
and Logistics activities total 1,166 1,145
(1)
Volumes associated with assets employed
through acquisitions and internal growth projects represent total
volumes (attributable to our interest) for the number of days or
months we employed the assets divided by the number of days or
months in the period.
(2)
Facilities 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 capacity divided by
6 to account for the 6:1 mcf of 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 EARNINGS PER LIMITED PARTNER UNIT
(in millions, except per unit data)
Three Months Ended
March 31, 2014 2013 Basic Net Income per
Limited Partner Unit Net income attributable to PAA $ 384 $ 528
Less: General partner's incentive distribution (1) (110 ) (86 )
Less: General partner 2% ownership (1) (6 ) (9 ) Net
income available to limited partners 268 433 Less: Undistributed
earnings allocated and distributions to participating securities
(1) (2 ) (3 ) Net income available to limited
partners in accordance with application of the two-class method for
MLPs $ 266 $ 430 360 336 Basic weighted
average number of limited partner units outstanding Basic net
income per limited partner unit $ 0.74 $ 1.28
Diluted Net Income per Limited Partner Unit Net income
attributable to PAA $ 384 $ 528 Less: General partner's incentive
distribution (1) (110 ) (86 ) Less: General partner 2% ownership
(1) (6 ) (9 ) Net income available to limited
partners 268 433 Less: Undistributed earnings allocated and
distributions to participating securities (1) (2 ) (1
) Net income available to limited partners in accordance with
application of the two-class method for MLPs $ 266 $ 432
Basic weighted average number of limited partner
units outstanding 360 336 Effect of dilutive securities: Weighted
average LTIP units (2) 3 3 Diluted
weighted average number of limited partner units outstanding
363 339 Diluted net income per limited
partner unit $ 0.73 $ 1.27
(1)
We calculate net income available to
limited partners 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, limited partners 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
March 31, 2014 2013 Selected Items
Impacting Comparability - Income/(Loss) (1):
Gains/(losses) from derivative activities net of inventory
valuation adjustments (2) $ 65 $ 24 Equity-indexed compensation
expense (3) (19 ) (24 ) Net gain/(loss) on foreign currency
revaluation (5 ) 8 Tax effect on selected items impacting
comparability (9 ) (5 ) Other (4) - 1
Selected items impacting comparability of net income attributable
to PAA $ 32 $ 4 Impact to basic net income per limited
partner unit $ 0.09 $ 0.01 Impact to diluted net
income per limited partner unit $ 0.08 $ 0.01
(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 gains and losses
resulting from derivative instruments that are related to
underlying activities in future periods or the reversal of
mark-to-market gains and losses from the prior period, net of
inventory valuation adjustments as applicable.
(3)
Equity-indexed compensation expense above
excludes the portion of equity-indexed compensation expense
represented by grants under LTIP that, pursuant to the terms of the
grant, will be settled in cash only and have no impact on diluted
units.
(4)
Includes other immaterial selected items
impacting comparability, as well as the noncontrolling interests'
portion of selected items.
PLAINS
ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES FINANCIAL
SUMMARY (unaudited)
COMPUTATION OF
ADJUSTED BASIC AND DILUTED EARNINGS PER LIMITED PARTNER
UNIT
(in millions, except per unit data)
Three Months Ended
March 31, 2014 2013 Basic Adjusted Net
Income per Limited Partner Unit Net income attributable to PAA
$ 384 $ 528 Selected items impacting comparability of net income
attributable to PAA (1) (32 ) (4 ) Adjusted net
income attributable to PAA 352 524 Less: General partner's
incentive distribution (2) (110 ) (86 ) Less: General partner 2%
ownership (2) (5 ) (9 ) Adjusted net income available
to limited partners 237 429 Less: Undistributed earnings allocated
and distributions to participating securities (2) (2 )
(3 ) Adjusted limited partners' net income $ 235 $
426 Basic weighted average number of limited partner
units outstanding 360 336 Basic adjusted net income per
limited partner unit $ 0.65 $ 1.27
Diluted
Adjusted Net Income per Limited Partner Unit Net income
attributable to PAA $ 384 $ 528
Selected items impacting comparability of
net income attributable to PAA (1)
(32 ) (4 ) Adjusted net income attributable to PAA
352 524 Less: General partner's incentive distribution (2) (110 )
(86 ) Less: General partner 2% ownership (2) (5 ) (9
) Adjusted net income available to limited partners 237 429 Less:
Undistributed earnings allocated and distributions to participating
securities (2) (2 ) (1 ) Adjusted limited partners'
net income $ 235 $ 428 Diluted weighted
average number of limited partner units outstanding 363 339
Diluted adjusted net income per limited partner unit $ 0.65
$ 1.26
(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 available
to limited partners 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, limited partners 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 March 31,
2014 2013
Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") and
Excluding Selected Items Impacting
Comparability ("Adjusted EBITDA") Reconciliations
Net Income $ 385 $ 536 Add: Interest expense, net 78 77 Add: Income
tax expense 48 53 Add: Depreciation and amortization 96
82 EBITDA $ 607 $ 748 Selected items impacting
comparability of EBITDA (1) (40 ) (9 ) Adjusted
EBITDA $ 567 $ 739 (1) Certain of our non-GAAP
financial measures may not be impacted by each of the selected
items impacting comparability.
Three Months Ended
March 31, 2014 2013 Adjusted EBITDA to
Implied Distributable Cash Flow ("DCF") Adjusted EBITDA $ 567 $
739 Interest expense, net (78 ) (77 ) Maintenance capital (46 ) (44
) Current income tax expense (36 ) (46 ) Equity earnings in
unconsolidated entities, net of distributions 5 - Distributions to
noncontrolling interests (1) (1 ) (12 ) Implied DCF $
411 $ 560 (1) Includes distributions that
pertain to the current period's net income, which are paid in the
subsequent period.
Three Months Ended March
31, 2014 2013 Cash Flow from Operating
Activities Reconciliation EBITDA $ 607 $ 748 Current income tax
expense (36 ) (46 ) Interest expense, net (78 ) (77 ) Net change in
assets and liabilities, net of acquisitions 295 303 Other items to
reconcile to cash flows from operating activities: Equity-indexed
compensation expense 34 51 Net cash
provided by operating activities $ 822 $ 979
PLAINS GP HOLDINGS AND SUBSIDIARIES FINANCIAL
SUMMARY (unaudited)
CONDENSED
CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions, except per share data)
Three Months Ended
March 31, 2014 Consolidating PAA
Adjustments(1)
PAGP REVENUES $ 11,684 $ - $ 11,684
COSTS AND EXPENSES Purchases and related costs 10,670 -
10,670 Field operating costs 336 - 336 General and administrative
expenses 89 1 90 Depreciation and amortization 96
- 96 Total costs and expenses
11,191 1 11,192
OPERATING INCOME 493 (1 ) 492
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 20
- 20 Interest expense, net (78 ) (3 ) (81 ) Other expense, net
(2 ) - (2 )
INCOME BEFORE
TAX 433 (4 ) 429 Current income tax expense (36 ) - (36 )
Deferred income tax expense (12 ) (9 ) (21 )
NET INCOME 385 (13 ) 372 Net income attributable to
noncontrolling interests (1 ) (357 ) (358 )
NET INCOME ATTRIBUTABLE TO PAGP $ 384 $ (370 ) $ 14
BASIC AND DILUTED NET INCOME PER CLASS A
SHARE $ 0.11
BASIC AND DILUTED WEIGHTED
AVERAGE CLASS A SHARES OUTSTANDING 135 (1)
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
(in millions)
March 31, 2014 Consolidating PAA
Adjustments(1)
PAGP ASSETS Current assets $ 4,932 $ 2 $ 4,934
Property and equipment, net 11,152 21 11,173 Goodwill 2,485 - 2,485
Linefill and base gas 864 - 864 Long-term inventory 264 - 264
Investments in unconsolidated entities 506 - 506 Other, net
499 1,083 1,582 Total assets $ 20,702 $ 1,106
$ 21,808
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities $ 5,554 $ 2 $ 5,556 Senior notes, net of
unamortized discount 6,711 - 6,711 Long-term debt under credit
facilities and other 107 520 627 Other long-term liabilities and
deferred credits 547 - 547 Total
liabilities 12,919 522 13,441 Partners' capital excluding
noncontrolling interests 7,724 (6,673 ) 1,051 Noncontrolling
interests 59 7,257 7,316 Total
partners' capital 7,783 584 8,367 Total
liabilities and partners' capital $ 20,702 $ 1,106 $ 21,808
(1) Represents the aggregate consolidating adjustments
necessary to produce consolidated financial statements for PAGP.
PLAINS GP HOLDINGS AND
SUBSIDIARIES DISTRIBUTION SUMMARY (unaudited)
Q1 2014 PAGP
DISTRIBUTION SUMMARY
(in millions, except per unit and per share data)
Q1 2014
(1) PAA Distribution/LP Unit $ 0.6300 GP Distribution/LP
Unit $ 0.3159 Total Distribution/LP Unit $ 0.9459
PAA LP Units Outstanding at 5/2/14 364 Gross GP
Distribution $ 121 Less: IDR Reduction (6 ) Net Distribution
from PAA to AAP $ 115 Less: Debt Service (3 ) Less: G&A Expense
(1 ) Less: Other - Cash Available for Distribution by
AAP $ 111
Distributions to AAP Partners Direct
AAP Owners & AAP Management (79.1% economic interest) 88 PAGP
(20.9% economic interest) 23 Total distributions to
AAP Partners $ 111 Distribution to PAGP Investors $
23 PAGP Class A Shares Outstanding at 5/2/14 136
PAGP Distribution/Class A Share $ 0.17055
(1) Amounts may not recalculate due to
rounding.
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
March 31, 2014 Basic and Diluted Net Income per Class A
Share Net income attributable to PAGP $ 14 Basic and diluted
weighted average number of Class A shares outstanding 135
Basic and diluted net income per Class A share $ 0.11
Plains All American Pipeline and Plains GP HoldingsRyan Smith,
(866) 809-1291Director, Investor RelationsorAl Swanson, (800)
564-3036Executive Vice President, CFO
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