Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP
Holdings (NYSE: PAGP) today reported first-quarter 2015
results.
Plains All American Pipeline, L.P.
Summary
Financial Information (1) (unaudited) (in
millions, except per unit data)
Three Months Ended
March 31,
2015 2014 %
Change
Net income attributable to PAA $ 283 $ 384 -26 %
Diluted
net income per limited partner unit $ 0.35 $ 0.73 -52 %
Diluted weighted average limited partner units outstanding
385 363 6 %
EBITDA $ 509 $ 607 -16 %
Three
Months Ended
March 31,
2015 2014 %
Change
Adjusted net income attributable to PAA $ 369 $ 352 5 %
Diluted adjusted net income per limited partner unit $ 0.57
$ 0.65 -12 %
Adjusted EBITDA $ 622 $ 567 10 %
Distribution per limited partner unit declared for the
period $ 0.685 $ 0.630 8.7 %
(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 solid first quarter results, with adjusted EBITDA
coming in about $12 million above the high end of our quarterly
guidance range,” said Greg L. Armstrong, Chairman and CEO of Plains
All American. “PAA will pay a quarterly distribution of $0.685 per
limited partner unit next week, which is the equivalent of $2.74
per unit on an annualized basis, while PAGP will pay a quarterly
distribution of $0.222 per Class A share, or $0.888 per share on an
annualized basis. Such distributions represent an 8.7% and 30.2%
increase over comparative distributions paid in the same quarter of
2014, respectively.
“Over the intermediate to long-term, we remain very constructive
on the outlook for the North American crude oil industry. As part
of our ongoing effort to address the industry’s long-term
infrastructure requirements, PAA increased its targeted 2015
expansion capital program by approximately 16% to $2.15
billion.”
Armstrong added, “Over the near term, however, we are more
cautious as high crude oil inventory levels present a challenge for
the industry. As a result, despite PAA’s first quarter
over-performance relative to guidance, we have elected to leave our
full year operating and financial guidance essentially unchanged.
Importantly, PAA remains well positioned to manage through industry
down cycles. PAA ended the first quarter of 2015 with $4.4 billion
of committed liquidity, a strong balance sheet and credit metrics
that are consistent with or favorable to our targeted levels.”
The following table summarizes selected PAA financial
information by segment for the first quarter of 2015:
Summary of
Selected Financial Data by Segment (1)
(unaudited)
(in millions)
Three Months Ended Three Months Ended
March 31, 2015 March 31, 2014 Transportation
Facilities Supply and
Logistics
Transportation Facilities Supply and
Logistics
Reported segment profit $ 241 $ 142 $ 130 $ 206 $ 154 $ 249
Selected items impacting the comparability of segment profit (2)
5 2 101 7 5
(55 )
Adjusted segment profit $ 246
$ 144 $ 231
$ 213 $ 159 $ 194
Percentage change in adjusted segment profit versus 2014
period
15%
-9%
19%
(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.
First-quarter 2015 Transportation adjusted segment profit
increased 15% versus comparable 2014 results. This increase was
primarily driven by higher crude oil pipeline volumes associated
with recently completed organic growth projects and earnings from
our 50% interest in the BridgeTex pipeline. In addition, certain of
our Canadian terminals were reclassified from the Facilities
segment to the Transportation segment in the second quarter of
2014.
First-quarter 2015 Facilities adjusted segment profit exceeded
the high end of our quarterly guidance range but decreased by 9%
over comparable 2014 results. This decrease was primarily due to
lower revenues from our rail terminals due to lower fees related to
the movement of certain volumes of Bakken crude oil, unfavorable
foreign currency impacts on Canadian natural gas liquids (“NGL”)
activities and the reclassification of certain Canadian terminals
to the Transportation segment.
First-quarter 2015 Supply and Logistics adjusted segment profit
increased by 19% over comparable 2014 results. This increase was
primarily driven by favorable NGL market conditions, offset
partially by crude oil differentials that were not as favorable in
2015 as they were in 2014. Additionally, 2014’s first quarter
results included costs to manage deliverability requirements
associated with our natural gas storage activities, which were not
incurred in the current year period.
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 tables included at the end of this release.
Information regarding PAGP’s distributions is reflected below:
Q1 2015 Q4
2014 Q1 2014 Distribution per Class A share declared
for the period $ 0.222 $ 0.203 $ 0.17055
Q1
2015 distribution percentage growth from prior periods
9.4%
30.2%
Conference Call
PAA and PAGP will hold a conference call on May 6, 2015 (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 2015. 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 Wednesday, May 6, 2015 to discuss the following items:
1. PAA's first-quarter 2015 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 2015; and
5. PAA 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, navigate to “Investor Relations,”
select “PAA” or “PAGP,” then “News & Events,” and then
“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) 230-1059. International callers should
dial (612) 288-0337. No password is required. The slide
presentation accompanying the conference call will be available a
few minutes prior to the call at 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 356914. The replay will be available
beginning Wednesday, May 6, 2015, at approximately 1:00 p.m.
EDT and will continue until 12:59 a.m. EDT on June 6, 2015.
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 Quarterly
Report on Form 10-Q.
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, failure to
implement or capitalize, or delays in implementing or capitalizing,
on planned growth projects; 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
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, whether from reduced cash flow
to fund drilling or the inability to access capital, or other
factors; 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 effects of competition;
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; weather interference with business
operations or project construction, including the impact of extreme
weather events or conditions; 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; 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; 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; non-utilization of our assets and facilities;
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 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 4.2 million
barrels per day of crude oil and NGL on its pipelines. 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
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per unit data)
Three Months
Ended
March 31,
2015 2014 REVENUES $ 5,942 $ 11,684
COSTS AND EXPENSES Purchases and related costs 5,042
10,670 Field operating costs 346 336 General and administrative
expenses 78 89 Depreciation and amortization 107
96 Total costs and expenses 5,573
11,191
OPERATING INCOME 369 493
OTHER INCOME/(EXPENSE) Equity earnings in unconsolidated
entities 37 20 Interest expense, net (102 ) (78 ) Other expense,
net (4 ) (2 )
INCOME BEFORE TAX 300 433
Current income tax expense (42 ) (36 ) Deferred income tax
benefit/(expense) 26 (12 )
NET
INCOME 284 385 Net income attributable to noncontrolling
interests (1 ) (1 )
NET INCOME ATTRIBUTABLE TO
PAA $ 283 $ 384
NET INCOME ATTRIBUTABLE
TO PAA: LIMITED PARTNERS $ 138 $ 268
GENERAL PARTNER $ 145 $ 116
BASIC
NET INCOME PER LIMITED PARTNER UNIT $ 0.36 $ 0.74
DILUTED NET INCOME PER LIMITED PARTNER UNIT $ 0.35
$ 0.73
BASIC WEIGHTED AVERAGE LIMITED
PARTNER UNITS OUTSTANDING 383 360
DILUTED WEIGHTED AVERAGE LIMITED PARTNER UNITS
OUTSTANDING 385 363
ADJUSTED
RESULTS
(in millions, except per unit data)
Three Months Ended
March 31,
2015 2014 ADJUSTED NET INCOME ATTRIBUTABLE
TO PAA $ 369 $ 352
DILUTED ADJUSTED NET
INCOME PER LIMITED PARTNER UNIT $ 0.57 $ 0.65
ADJUSTED EBITDA $ 622 $ 567
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(in millions)
March 31, December 31, 2015
2014 ASSETS Current assets $ 3,453 $ 4,179 Property
and equipment, net 12,484 12,272 Goodwill 2,435 2,465 Investments
in unconsolidated entities 1,784 1,735 Linefill and base gas 960
930 Long-term inventory 149 186 Other long-term assets, net
459 489 Total assets $ 21,724 $ 22,256
LIABILITIES AND PARTNERS' CAPITAL Current
liabilities $ 3,531 $ 4,755 Senior notes, net of unamortized
discount 8,758 8,757 Other long-term debt 5 5 Other long-term
liabilities and deferred credits 594 548
Total liabilities 12,888 14,065 Partners' capital
excluding noncontrolling interests 8,778 8,133 Noncontrolling
interests 58 58 Total partners' capital
8,836 8,191 Total liabilities and
partners' capital $ 21,724 $ 22,256
DEBT
CAPITALIZATION RATIOS
(in millions)
March 31, December 31, 2015
2014 Short-term debt $ 553 $ 1,287 Long-term debt
8,763 8,762 Total debt $ 9,316 $ 10,049
Long-term debt $ 8,763 $ 8,762 Partners' capital
8,836 8,191 Total book capitalization $
17,599 $ 16,953 Total book capitalization, including
short-term debt $ 18,152 $ 18,240 Long-term
debt-to-total book capitalization 50 % 52 % Total debt-to-total
book capitalization, including short-term debt 51 % 55 %
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, 2015 March 31, 2014 Supply and
Supply and Transportation Facilities
Logistics
Transportation Facilities Logistics Revenues
(1) $ 400 $ 257 $ 5,634 $ 387 $ 299 $ 11,368 Purchases and related
costs (1) (30 ) (4 ) (5,353 ) (37 ) (26 ) (10,975 ) Field operating
costs (1) (2) (136 ) (91 ) (118 ) (129 ) (97 ) (106 )
Equity-indexed compensation expense - operations (3 ) (1 ) (1 ) (4
) (1 ) (1 ) Segment general and administrative expenses (2) (3) (22
) (15 ) (27 ) (22 ) (13 ) (26 ) Equity-indexed compensation expense
- general and administrative (5 ) (4 ) (5 ) (9 ) (8 ) (11 ) Equity
earnings in unconsolidated entities 37 -
- 20 - -
Reported segment profit $ 241 $ 142 $ 130 $ 206 $ 154 $ 249
Selected items impacting comparability of segment profit (4)
5 2 101 7 5
(55 ) Adjusted segment profit $ 246 $ 144
$ 231 $ 213 $ 159 $ 194
Maintenance capital $ 33 $ 15 $ 2 $ 34
$ 10 $ 2
(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
March 31,
2015 2014 Transportation segment (average
daily volumes in thousands of barrels per day): Tariff
activities Crude Oil Pipelines All American 36 33 Bakken Area
Systems 152 131 Basin / Mesa / Sunrise 821 745 BridgeTex 83 -
Capline 153 126 Eagle Ford Area Systems 263 189 Line 63 / Line 2000
136 125 Manito 53 45 Mid-Continent Area Systems 371 326 Permian
Basin Area Systems 754 760 Rainbow 118 120 Rangeland 62 69 Salt
Lake City Area Systems 130 131 South Saskatchewan 66 64 White
Cliffs 47 23 Other 687 650 NGL Pipelines Co-Ed 61 57 Other 130 116
Tariff activities total 4,123 3,710 Trucking 121 130 Transportation
segment total 4,244 3,840
Facilities segment (average
monthly volumes):
Crude oil, refined products and NGL
terminalling and storage
(average monthly capacity in millions of barrels) 99 95 Rail load /
unload volumes (average volumes in thousands of barrels per day)
206 229 Natural gas storage
(average monthly working capacity in
billions of cubic feet)
97 97 NGL fractionation (average volumes in thousands of barrels
per day) 102 92 Facilities segment total
(average monthly volumes in millions of
barrels) (2)
124 121
Supply and Logistics segment (average daily
volumes in thousands of barrels per day): Crude oil lease
gathering purchases 981 893 NGL sales 286 273 Supply and Logistics
segment total 1,267 1,166
(1)
Volumes associated with assets employed
through acquisitions and capital expansion 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 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 LIMITED PARTNER
UNIT
(in millions, except per unit data)
Three Months Ended
March 31,
2015 2014 Basic Net Income per Limited Partner
Unit Net income attributable to PAA $ 283 $ 384 Less: General
partner's incentive distribution (1) (142 ) (110 ) Less: General
partner 2% ownership (1) (3 ) (6 ) Net income
available to limited partners 138 268 Less: Undistributed earnings
allocated and distributions to participating securities (1)
(2 ) (2 ) Net income available to limited partners in
accordance with application of the two-class method for MLPs $ 136
$ 266 Basic weighted average limited partner
units outstanding 383 360 Basic net income per limited
partner unit $ 0.36 $ 0.74
Diluted Net
Income per Limited Partner Unit Net income attributable to PAA
$ 283 $ 384 Less: General partner's incentive distribution (1) (142
) (110 ) Less: General partner 2% ownership (1) (3 )
(6 ) Net income available to limited partners 138 268 Less:
Undistributed earnings allocated and distributions to participating
securities (1) (2 ) (2 ) Net income available to
limited partners in accordance with application of the two-class
method for MLPs $ 136 $ 266 Basic weighted
average limited partner units outstanding 383 360 Effect of
dilutive securities: Weighted average LTIP units (2) 2
3 Diluted weighted average limited partner
units outstanding 385 363
Diluted net income per limited partner unit $ 0.35 $ 0.73
(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,
2015 2014 Selected Items Impacting Comparability -
Income/(Loss) (1):
Gains/(losses) from derivative activities
net of inventory valuation adjustments (2)
$ (91 ) $ 65 Long-term inventory costing adjustments (3) (38 ) -
Equity-indexed compensation expense (4) (11 ) (19 ) Net gain/(loss)
on foreign currency revaluation 27 (5 ) Tax effect on selected
items impacting comparability 27 (9 ) Selected
items impacting comparability of net income attributable to PAA $
(86 ) $ 32 Impact to basic net income per limited
partner unit $ (0.22 ) $ 0.09 Impact to diluted net income
per limited partner unit $ (0.22 ) $ 0.08
(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 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). See Note 5 to our Consolidated
Financial Statements included in Part IV of our 2014 Annual Report
on Form 10-K for a complete discussion of our long-term
inventory.
(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.
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,
2015 2014 Basic Adjusted Net Income per Limited
Partner Unit Net income attributable to PAA $ 283 $ 384
Selected items impacting comparability of net income attributable
to PAA (1) 86 (32 ) Adjusted net income
attributable to PAA 369 352 Less: General partner's incentive
distribution (2) (142 ) (110 ) Less: General partner 2% ownership
(2) (5 ) (5 )
Adjusted net income available to limited
partners
222 237 Less: Undistributed earnings allocated and distributions to
participating securities (2) (2 ) (2 ) Adjusted
limited partners' net income $ 220 $ 235 Basic
weighted average limited partner units outstanding 383 360
Basic adjusted net income per limited partner unit $ 0.58 $
0.65
Diluted Adjusted Net Income per Limited
Partner Unit Net income attributable to PAA $ 283 $ 384
Selected items impacting comparability of net income attributable
to PAA (1) 86 (32 ) Adjusted net income
attributable to PAA 369 352 Less: General partner's incentive
distribution (2) (142 ) (110 ) Less: General partner 2% ownership
(2) (5 ) (5 ) Adjusted net income available to
limited partners 222 237 Less: Undistributed earnings allocated and
distributions to participating securities (2) (2 ) (2
) Adjusted limited partners' net income $ 220 $ 235
Diluted weighted average limited partner units outstanding
385 363 Diluted adjusted net income per limited partner unit
$ 0.57 $ 0.65
(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,
2015 2014 Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") and
Excluding Selected Items Impacting Comparability ("Adjusted
EBITDA") Reconciliations Net Income $ 284 $ 385 Add: Interest
expense, net 102 78 Add: Income tax expense 16 48 Add: Depreciation
and amortization 107 96 EBITDA $ 509 $
607 Selected items impacting comparability of EBITDA (1) 113
(40 ) Adjusted EBITDA $ 622 $ 567
(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,
2015 2014 Adjusted EBITDA to Implied Distributable
Cash Flow ("DCF") Reconciliation Adjusted EBITDA $ 622 $ 567
Interest expense, net (102 ) (78 ) Maintenance capital (50 ) (46 )
Current income tax expense (42 ) (36 ) Equity earnings in
unconsolidated entities, net of distributions 17 5 Distributions to
noncontrolling interests (1) (1 ) (1 ) Implied DCF $
444 $ 411 (1) Includes distributions that
pertain to the current period's net income, which are paid in the
subsequent period.
Three Months Ended
March 31,
2015 2014 Net Cash Provided by Operating
Activities Reconciliation EBITDA $ 509 $ 607 Current income tax
expense (42 ) (36 ) Interest expense, net (102 ) (78 ) Net change
in assets and liabilities, net of acquisitions 348 295 Other items
to reconcile to net cash provided by operating activities:
Equity-indexed compensation expense 19 34
Net cash provided by operating activities $ 732 $ 822
PLAINS GP HOLDINGS AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions, except per share data)
Three Months
Ended Three Months Ended March 31, 2015 March
31, 2014 PAA
ConsolidatingAdjustments
(1)
PAGP PAA
ConsolidatingAdjustments
(1)
PAGP REVENUES $ 5,942 $ - $ 5,942 $ 11,684 $ -
$ 11,684
COSTS AND EXPENSES Purchases and related
costs 5,042 - 5,042 10,670 - 10,670 Field operating costs 346 - 346
336 - 336 General and administrative expenses 78 1 79 89 1 90
Depreciation and amortization 107 1
108 96 - 96
Total costs and expenses 5,573 2
5,575 11,191 1 11,192
OPERATING INCOME 369 (2 ) 367 493 (1 ) 492
OTHER INCOME/(EXPENSE) Equity earnings in
unconsolidated entities 37 - 37 20 - 20 Interest expense, net (102
) (2 ) (104 ) (78 ) (3 ) (81 ) Other expense, net (4 )
- (4 ) (2 ) - (2 )
INCOME BEFORE TAX 300 (4 ) 296 433 (4 ) 429 Current
income tax expense (42 ) - (42 ) (36 ) - (36 ) Deferred income tax
benefit/(expense) 26 (18 ) 8
(12 ) (9 ) (21 )
NET INCOME 284
(22 ) 262 385 (13 ) 372 Net income attributable to noncontrolling
interests (1 ) (230 ) (231 ) (1 )
(357 ) (358 )
NET INCOME ATTRIBUTABLE TO PAGP
$ 283 $ (252 ) $ 31 $ 384 $ (370 ) $ 14
BASIC AND DILUTED NET INCOME PER CLASS A SHARE
$ 0.14 $ 0.11
BASIC AND DILUTED WEIGHTED
AVERAGE CLASS A SHARES OUTSTANDING 212 135
(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, 2015 December 31, 2014
PAA
ConsolidatingAdjustments
(1)
PAGP PAA
ConsolidatingAdjustments
(1)
PAGP ASSETS Current assets $ 3,453 $ 2 $ 3,455 $
4,179 $ 2 $ 4,181 Property and equipment, net 12,484 20 12,504
12,272 20 12,292 Goodwill 2,435 - 2,435 2,465 - 2,465 Investments
in unconsolidated entities 1,784 - 1,784 1,735 - 1,735 Deferred tax
asset - 1,850 1,850 - 1,705 1,705 Linefill and base gas 960 - 960
930 - 930 Long-term inventory 149 - 149 186 - 186 Other long-term
assets, net 459 - 459 489
- 489 Total assets $ 21,724 $ 1,872 $ 23,596 $
22,256 $ 1,727 $ 23,983
LIABILITIES AND PARTNERS'
CAPITAL Current liabilities $ 3,531 $ 1 $ 3,532 $ 4,755 $ 1 $
4,756 Senior notes, net of unamortized discount 8,758 - 8,758 8,757
- 8,757 Other long-term debt 5 559 564 5 536 541 Other long-term
liabilities and deferred credits 594 -
594 548 - 548 Total liabilities 12,888
560 13,448 14,065 537 14,602 Partners' capital excluding
noncontrolling interests 8,778 (6,974 ) 1,804 8,133 (6,476 ) 1,657
Noncontrolling interests 58 8,286 8,344
58 7,666 7,724 Total partners' capital
8,836 1,312 10,148 8,191
1,190 9,381 Total liabilities and partners' capital $
21,724 $ 1,872 $ 23,596 $ 22,256 $ 1,727 $ 23,983
(1) Represents the aggregate consolidating adjustments
necessary to produce consolidated financial statements for PAGP.
PLAINS GP HOLDINGS AND SUBSIDIARIES DISTRIBUTION
SUMMARY (unaudited)
Q1 2015 PAGP
DISTRIBUTION SUMMARY
(in millions, except per unit and per share data)
Q1 2015 (1)
PAA Distribution/LP Unit $ 0.6850 GP Distribution/LP Unit $ 0.3722
Total Distribution/LP Unit $ 1.0572 PAA LP
Units Outstanding at 5/1/15 397 Gross GP Distribution $ 153
Less: IDR Reduction (6 ) Net Distribution from PAA to AAP
(2) $ 148 Less: Debt Service (2 ) Less: G&A Expense (1 )
Cash Available for Distribution by AAP $ 145
Distributions to AAP Partners Direct AAP Owners & AAP
Management (65.7% economic interest) $ 95 PAGP (34.3% economic
interest) 50 Total distributions to AAP Partners $
145 Distribution to PAGP Investors $ 50 PAGP
Class A Shares Outstanding at 5/1/15 224 PAGP
Distribution/Class A Share $ 0.222
(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
March 31, 2015 2014 Basic and Diluted Net
Income per Class A Share Net income attributable to PAGP $ 31 $
14 Basic and diluted weighted average Class A shares outstanding
212 135 Basic and diluted net income per Class A share $
0.14 $ 0.11
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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