Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP
Holdings (NYSE: PAGP) today reported fourth-quarter and full-year
2014 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,
2014 2013
%Change
2014 2013
%Change
Net income attributable to PAA $ 389 $ 309 26 % $ 1,384 $
1,361 2 %
Diluted net income per limited partner
unit
$ 0.67 $ 0.58 16 % $ 2.38 $ 2.80 -15 %
EBITDA $ 664 $ 526 26
% $ 2,289 $ 2,168 6 %
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2014 2013
%Change
2014 2013
%Change
Adjusted net income attributable to PAA $ 362 $ 371 -2 % $
1,347 $ 1,466 -8 %
Diluted adjusted net income per limited
partner unit $ 0.60 $ 0.76 -21 % $ 2.28 $ 3.10 -26 %
Adjusted EBITDA $ 594 $ 595 0 % $ 2,200 $ 2,292 -4 %
Distribution per unit declared for the period $ 0.6750 $
0.6150 9.8 %
(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.
“2014 represents another year of solid execution for PAA, as we
delivered results in line with to slightly ahead of the midpoint of
our guidance for both the fourth quarter and full year, excluding
the impact of a fourth quarter acquisition,” stated Greg L.
Armstrong, Chairman and CEO of Plains All American. “These results
were underpinned by solid performance in our Transportation and
Supply and Logistics segments.”
Armstrong noted that following PAA’s November earnings
conference call, crude oil and natural gas liquids prices decreased
approximately 40%, which resulted in significant reductions in the
outlook for producer drilling activities in 2015 – in many cases
ranging from 30% to 40% below 2014 levels.
“PAA is well positioned to manage through industry down cycles;
however, we are not immune to the adverse impacts of a major step
change in commodity prices that is accompanied by a similar change
in producers’ activity levels. Accordingly, we have reduced the
midpoint of our acquisition adjusted EBITDA guidance for 2015 by
6.5%, from just over $2.5 billion, as furnished on November 5th, to
$2.35 billion and revised our distribution growth target for 2015.
We are currently targeting distribution growth for PAA of 7% for
2015, which would equate to a distribution increase for PAGP of
approximately 21%.”
Armstrong stated that the updated guidance midpoint represented
an increase of approximately 7% over 2014 results and is based on
2015 WTI oil prices hovering around $50 per barrel for all of 2015
and the expectation that producer drilling activities will be
materially reduced relative to 2014. WTI prices averaged
approximately $93 per barrel in 2014.
“While the duration of the current down-cycle is unknown, our
confidence in the North American crude oil resource base and its
ultimate development remains high. As we look ahead, PAA remains
well positioned to continue to grow and strengthen its business
through organic growth projects and also to actively pursue
attractive acquisition opportunities. For 2015, we are targeting an
expansion capital plan of $1.85 billion, down approximately 9% from
the $2.03 billion spent in 2014. Importantly, PAA enters 2015 with
a strong balance sheet, credit metrics that are consistent with or
favorable to our targeted levels and $3.6 billion of committed
liquidity.”
The following table summarizes selected PAA financial
information by segment for the fourth quarter and full year of
2014:
Summary of
Selected Financial Data by Segment (1)
(unaudited)
(in millions)
Three Months Ended Three Months Ended
December 31, 2014 December 31, 2013
Transportation Facilities
Supply andLogistics
Transportation Facilities
Supply andLogistics
Reported segment profit $ 267 $ 149 $ 249 $ 207 $ 170 $ 149
Selected items impacting the comparability
of segment profit (2)
3 2 (76 ) 7 (1 )
60
Adjusted segment profit $ 270
$ 151 $ 173 $
214 $ 169 $ 209
Percentage change in adjusted segment profit versus 2013
period 26 % -11 %
-17 % Twelve Months Ended
Twelve Months Ended December 31, 2014 December 31,
2013 Transportation Facilities
Supply andLogistics
Transportation Facilities
Supply andLogistics
Reported segment profit $ 925 $ 584 $ 782 $ 729 $ 616 $ 822
Selected items impacting the comparability
of segment profit (2)
25 13 (131 ) 31 13
71
Adjusted segment profit $ 950
$ 597 $ 651
$ 760 $ 629 $ 893
Percentage change in adjusted segment profit versus 2013
period 25 % -5 %
-27 %
(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 2014 Transportation adjusted segment profit
increased 26% versus comparable 2013 results. This increase was
primarily driven by higher crude oil pipeline volumes associated
with North American crude oil production and recently completed
organic growth projects, increased tariff rates on certain of our
crude oil pipelines and the acquisition of a 50% interest in the
BridgeTex pipeline completed in November 2014.
Fourth-quarter 2014 Facilities adjusted segment profit decreased
11% versus comparable 2013 results. This decrease was primarily due
to the impact of recontracting capacity originally contracted at
higher rates within our natural gas storage operations.
Fourth-quarter 2014 Supply and Logistics adjusted segment profit
decreased by approximately 17% relative to comparable 2013 results.
This decrease was primarily related to less favorable NGL and crude
oil market conditions in the fourth quarter of 2014 compared to the
same 2013 period. These impacts were partially offset by growth in
crude oil lease gathering volumes.
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
Q4 2014 Q3 2014
Q4 2013(non-prorated)
(1)
Distribution per share declared for the period $ 0.20300 $
0.19075 $ 0.15979
Q4 2014 distribution percentage
growth over previous benchmarks 6.4 % 27.0 %
(1) Reflects a full fourth quarter 2013
distribution per Class A share (before proration), assuming PAGP's
ownership interest in PAA's general partner was for the full fourth
quarter of 2013.
Conference Call
PAA and PAGP will hold a conference call on February 5, 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 first 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 10:00 a.m. EST
on Thursday, February 5, 2015 to discuss the following items:
1. PAA's fourth-quarter and full-year 2014
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 2015; 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) 230-1085. International callers should
dial (612) 288-0340. 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 349000. The replay will be available
beginning Thursday, February 5, 2015, at approximately
12:00 p.m. EST and will continue until 11:59 p.m. EST on March
5, 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), (iii) inventory valuation
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 “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 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 4.1 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 Twelve Months Ended
December 31,
December 31,
2014 2013 2014 2013
REVENUES $ 9,459 $ 10,631 $ 43,464 $ 42,249
COSTS
AND EXPENSES Purchases and related costs 8,384 9,731 39,500
38,465 Field operating costs 378 312 1,456 1,322 General and
administrative expenses 67 84 325 359 Depreciation and amortization
100 110 392 375
Total costs and expenses 8,929 10,237
41,673 40,521
OPERATING INCOME 530 394 1,791 1,728
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 35
22 108 64 Interest expense, net (93 ) (79 ) (340 ) (303 ) Other
income/(expense), net (1 ) - (2 )
1
INCOME BEFORE TAX 471 337 1,557 1,490
Current income tax expense (9 ) (31 ) (71 ) (100 ) Deferred income
tax benefit/(expense) (72 ) 12 (100 )
1
NET INCOME 390 318 1,386 1,391 Net
income attributable to noncontrolling interests (1 )
(9 ) (2 ) (30 )
NET INCOME ATTRIBUTABLE TO PAA
$ 389 $ 309 $ 1,384 $ 1,361
NET INCOME ATTRIBUTABLE TO PAA: LIMITED PARTNERS $
253 $ 203 $ 884 $ 967
GENERAL
PARTNER $ 136 $ 106 $ 500 $ 394
BASIC NET INCOME PER LIMITED PARTNER UNIT $ 0.67
$ 0.59 $ 2.39 $ 2.82
DILUTED
NET INCOME PER LIMITED PARTNER UNIT $ 0.67 $ 0.58
$ 2.38 $ 2.80
BASIC WEIGHTED AVERAGE
LIMITED PARTNER UNITS OUTSTANDING 373 344
367 341
DILUTED
WEIGHTED AVERAGE LIMITED PARTNER UNITS OUTSTANDING 375
346 369 343
ADJUSTED
RESULTS
(in millions, except per unit data)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2014 2013 2014 2013 ADJUSTED
NET INCOME ATTRIBUTABLE TO PAA $ 362 $ 371 $
1,347 $ 1,466
DILUTED ADJUSTED NET INCOME
PER LIMITED PARTNER UNIT $ 0.60 $ 0.76 $ 2.28
$ 3.10
ADJUSTED EBITDA $ 594 $
595 $ 2,200 $ 2,292
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(in millions)
December 31, December 31, 2014
2013 ASSETS Current assets $ 4,179 $ 4,964 Property
and equipment, net 12,272 10,819 Goodwill 2,465 2,503 Investments
in unconsolidated entities 1,735 485 Linefill and base gas 930 798
Long-term inventory 186 251 Other, net 489 540
Total assets $ 22,256 $ 20,360
LIABILITIES AND PARTNERS' CAPITAL Current liabilities $
4,755 $ 5,411 Senior notes, net of unamortized discount 8,757 6,710
Other long-term debt 5 5 Other long-term liabilities and deferred
credits 548 531 Total liabilities
14,065 12,657 Partners' capital excluding noncontrolling
interests 8,133 7,644 Noncontrolling interests 58
59 Total partners' capital 8,191
7,703 Total liabilities and partners' capital $ 22,256
$ 20,360
DEBT
CAPITALIZATION RATIOS
(in millions)
December 31, December 31, 2014
2013 Short-term debt $ 1,287 $ 1,113 Long-term debt
8,762 6,715 Total debt $ 10,049 $ 7,828
Long-term debt $ 8,762 $ 6,715 Partners' capital
8,191 7,703 Total book capitalization $
16,953 $ 14,418 Total book capitalization, including
short-term debt $ 18,240 $ 15,531 Long-term
debt-to-total book capitalization 52 % 47 % Total debt-to-total
book capitalization, including short-term debt 55 % 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
December 31, 2014 December 31, 2013 Supply and
Supply and Transportation Facilities
Logistics Transportation Facilities
Logistics Revenues (1) $ 433 $ 270 $ 9,129 $ 387 $ 394 $
10,151 Purchases and related costs (1) (35 ) (8 ) (8,711 ) (38 )
(116 ) (9,875 ) Field operating costs (1) (2) (142 ) (97 ) (141 )
(125 ) (89 ) (97 ) Equity-indexed compensation expense - operations
(1 ) - - (3 ) (1 ) - Segment general and administrative expenses
(2) (3) (20 ) (14 ) (26 ) (29 ) (16 ) (23 ) Equity-indexed
compensation expense - general and administrative (3 ) (2 ) (2 ) (7
) (2 ) (7 ) Equity earnings in unconsolidated entities 35
- - 22 -
- Reported segment profit $ 267 $ 149 $ 249 $
207 $ 170 $ 149
Selected items impacting comparability of
segment profit (4)
3 2 (76 ) 7
(1 ) 60 Adjusted segment profit $ 270 $ 151
$ 173 $ 214 $ 169 $ 209
Maintenance capital $ 54 $ 17 $ 2 $ 36
$ 13 $ 3
Twelve Months Ended Twelve
Months Ended December 31, 2014 December 31, 2013
Supply and Supply and Transportation
Facilities Logistics Transportation
Facilities Logistics Revenues (1) $ 1,655 $ 1,127 $
42,150 $ 1,498 $ 1,377 $ 40,696 Purchases and related costs (1)
(151 ) (55 ) (40,752 ) (147 ) (312 ) (39,315 ) Field operating
costs (1) (2) (560 ) (404 ) (481 ) (528 ) (362 ) (422 )
Equity-indexed compensation expense - operations (15 ) (4 ) (2 )
(18 ) (2 ) (3 ) Segment general and administrative expenses (2) (3)
(83 ) (60 ) (105 ) (101 ) (63 ) (102 ) Equity-indexed compensation
expense - general and administrative (29 ) (20 ) (28 ) (39 ) (22 )
(32 ) Equity earnings in unconsolidated entities 108
- - 64 -
- Reported segment profit $ 925 $ 584 $ 782 $ 729 $
616 $ 822
Selected items impacting comparability of
segment profit (4)
25 13 (131 ) 31
13 71 Adjusted segment profit $ 950
$ 597 $ 651 $ 760 $ 629 $ 893
Maintenance capital $ 165 $ 52 $ 7
$ 123 $ 38 $ 15 (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,
2014 2013 2014 2013
Transportation activities (average daily volumes in thousands of
barrels per day): Tariff activities Crude Oil Pipelines All
American 36 40 37 40 Bakken Area Systems 157 135 149 131 Basin /
Mesa / Sunrise 732 737 733 718 BridgeTex 55 - 14 - Capline 182 144
152 151 Eagle Ford Area Systems 262 166 227 102 Line 63 / Line 2000
129 113 122 113 Manito 55 44 47 46 Mid-Continent Area Systems 370
293 348 281 Permian Basin Area Systems 764 703 765 581 Rainbow 117
120 112 124 Rangeland 65 64 65 60 Salt Lake City Area Systems 143
128 136 131 South Saskatchewan 66 57 62 51 White Cliffs 40 25 30 23
Other 829 688 767 725 NGL Pipelines Co-Ed 61 58 58 56 Other 129 206
128 194 Refined Products Pipelines - 9 - 68 Tariff activities total
4,192 3,730 3,952 3,595 Trucking 122 129 127 117 Transportation
activities total 4,314 3,859 4,079 3,712
Facilities
activities (average monthly volumes): Crude oil, refined
products and NGL terminalling and storage
(average monthly capacity in millions of
barrels)
95 94 95 94 Rail load / unload volumes (average volumes in
thousands of barrels per day) 229 221 231 221 Natural gas storage
(average monthly working capacity in billions of cubic feet) 97 97
97 96 NGL fractionation (average volumes in thousands of barrels
per day) 103 89 96 96 Facilities activities total
(average monthly volumes in millions of
barrels) (2)
122 120 121 120
Supply and Logistics activities (average
daily volumes in thousands of barrels per day): Crude oil lease
gathering purchases 999 870 949 859 NGL sales 268 272 208 215
Waterborne cargos - - - 4 Supply and Logistics activities total
1,267 1,142 1,157 1,078
(1)
Volumes associated with assets employed
through acquisitions and expansion capital 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 activities 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
Twelve Months Ended
December 31,
December 31,
2014 2013 2014 2013 Basic Net Income
per Limited Partner Unit Net income attributable to PAA $ 389 $
309 $ 1,384 $ 1,361 Less: General partner's incentive distribution
(1) (131 ) (102 ) (482 ) (375 ) Less: General partner 2% ownership
(1) (5 ) (4 ) (18 ) (19 ) Net income
available to limited partners 253 203 884 967 Less: Undistributed
earnings allocated and distributions to participating securities
(1) (2 ) (2 ) (6 ) (7 ) Net income
available to limited partners in accordance with application of the
two-class method for MLPs $ 251 $ 201 $ 878 $
960 Basic weighted average limited partner units
outstanding 373 344 367 341 Basic net income per limited
partner unit $ 0.67 $ 0.59 $ 2.39 $ 2.82
Diluted Net Income per Limited Partner Unit
Net income attributable to PAA $ 389 $ 309 $ 1,384 $ 1,361 Less:
General partner's incentive distribution (1) (131 ) (102 ) (482 )
(375 ) Less: General partner 2% ownership (1) (5 ) (4
) (18 ) (19 ) Net income available to limited
partners 253 203 884 967 Less: Undistributed earnings allocated and
distributions to participating securities (1) (2 ) (2
) (6 ) (6 ) Net income available to limited partners
in accordance with application of the two-class method for MLPs $
251 $ 201 $ 878 $ 961 Basic
weighted average limited partner units outstanding 373 344 367 341
Effect of dilutive securities: Weighted average LTIP units (2)
2 2 2 2
Diluted weighted average limited partner units outstanding
375 346 369 343
Diluted net income per limited partner unit $ 0.67 $
0.58 $ 2.38 $ 2.80
(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
Twelve Months Ended
December 31,
December 31,
2014 2013 2014 2013 Selected Items
Impacting Comparability - Income/(Loss) (1):
Gains/(losses) from derivative activities net of inventory
valuation adjustments (2) $ 166 $ (51 ) $ 243 $ (59 ) Long-term
inventory valuation adjustments (3) (85 ) - (85 ) - Equity-indexed
compensation expense (4) (8 ) (12 ) (56 ) (63 ) Net loss on foreign
currency revaluation (3 ) (7 ) (13 ) (1 ) Tax effect on selected
items impacting comparability (43 ) 8 (52 ) 16 Other (5) -
- - 2 Selected
items impacting comparability of net income attributable to PAA $
27 $ (62 ) $ 37 $ (105 ) Impact to basic net
income per limited partner unit $ 0.07 $ (0.17 ) $ 0.10
$ (0.30 ) Impact to diluted net income per limited partner
unit $ 0.07 $ (0.18 ) $ 0.10 $ (0.30 )
(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)
Includes changes in the average cost of
long-term inventory that result from fluctuations in market prices.
Long-term inventory is comprised of minimum inventory requirements
in third-party assets and other working inventory that is needed
for our commercial operations.
(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 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
Twelve Months Ended
December 31,
December 31,
2014 2013 2014 2013 Basic Adjusted
Net Income per Limited Partner Unit Net income attributable to
PAA $ 389 $ 309 $ 1,384 $ 1,361 Selected items impacting
comparability of net income attributable to PAA (1) (27 )
62 (37 ) 105 Adjusted net income
attributable to PAA 362 371 1,347 1,466 Less: General partner's
incentive distribution (2) (131 ) (102 ) (482 ) (375 ) Less:
General partner 2% ownership (2) (4 ) (5 ) (17
) (22 ) Adjusted net income available to limited partners
227 264 848 1,069 Less: Undistributed earnings allocated and
distributions to participating securities (2) (2 ) (2
) (6 ) (7 ) Adjusted limited partners' net income $
225 $ 262 $ 842 $ 1,062 Basic
weighted average limited partner units outstanding 373 344 367 341
Basic adjusted net income per limited partner unit $ 0.60
$ 0.76 $ 2.29 $ 3.12
Diluted
Adjusted Net Income per Limited Partner Unit Net income
attributable to PAA $ 389 $ 309 $ 1,384 $ 1,361 Selected items
impacting comparability of net income attributable to PAA (1)
(27 ) 62 (37 ) 105
Adjusted net income attributable to PAA 362 371 1,347 1,466 Less:
General partner's incentive distribution (2) (131 ) (102 ) (482 )
(375 ) Less: General partner 2% ownership (2) (4 ) (5
) (17 ) (22 ) Adjusted net income available to
limited partners 227 264 848 1,069 Less: Undistributed earnings
allocated and distributions to participating securities (2)
(2 ) (2 ) (6 ) (5 ) Adjusted limited partners'
net income $ 225 $ 262 $ 842 $ 1,064
Diluted weighted average limited partner units outstanding
375 346 369 343 Diluted adjusted net income per limited
partner unit $ 0.60 $ 0.76 $ 2.28 $ 3.10
(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 Twelve Months Ended
December 31,
December 31,
2014 2013 2014 2013
Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") and
Excluding Selected Items Impacting
Comparability ("Adjusted EBITDA") Reconciliations
Net Income $ 390 $ 318 $ 1,386 $ 1,391 Add: Interest expense, net
93 79 340 303 Add: Income tax expense 81 19 171 99 Add:
Depreciation and amortization 100 110
392 375 EBITDA $ 664 $ 526 $ 2,289 $
2,168 Selected items impacting comparability of EBITDA (1)
(70 ) 69 (89 ) 124 Adjusted
EBITDA $ 594 $ 595 $ 2,200 $ 2,292
(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,
2014 2013 2014 2013 Adjusted EBITDA
to Implied Distributable Cash Flow ("DCF") Adjusted EBITDA $
594 $ 595 $ 2,200 $ 2,292 Interest expense, net (93 ) (79 ) (340 )
(303 ) Maintenance capital (73 ) (52 ) (224 ) (176 ) Current income
tax expense (9 ) (31 ) (71 ) (100 ) Equity earnings in
unconsolidated entities, net of distributions (4 ) (3 ) (3 ) (10 )
Distributions to noncontrolling interests (1) (1 ) (1
) (3 ) (38 ) Implied DCF $ 414 $ 429 $
1,559 $ 1,665 (1) Includes distributions that
pertain to the current period's net income, which are paid in the
subsequent period.
Three Months Ended Twelve
Months Ended
December 31,
December 31,
2014 2013 2014 2013 Cash Flow from
Operating Activities Reconciliation EBITDA $ 664 $ 526 $ 2,289
$ 2,168 Current income tax expense (9 ) (31 ) (71 ) (100 ) Interest
expense, net (93 ) (79 ) (340 ) (303 ) Net change in assets and
liabilities, net of acquisitions 156 (76 ) 28 73 Other items to
reconcile to cash flows from operating activities: Equity-indexed
compensation expense 8 20 98
116 Net cash provided by operating
activities $ 726 $ 360 $ 2,004 $ 1,954
PLAINS GP HOLDINGS AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions, except per share data)
Three Months
Ended Twelve Months Ended December 31, 2014
December 31, 2014 PAA
ConsolidatingAdjustments
(1)
PAGP PAA
ConsolidatingAdjustments
(1)
PAGP REVENUES $ 9,459 $ - $ 9,459 $ 43,464 $ -
$ 43,464
COSTS AND EXPENSES Purchases and related
costs 8,384 - 8,384 39,500 - 39,500 Field operating costs 378 - 378
1,456 - 1,456 General and administrative expenses 67 3 70 325 6 331
Depreciation and amortization 100 -
100 392 2 394
Total costs and expenses 8,929 3
8,932 41,673 8
41,681
OPERATING INCOME 530 (3 ) 527 1,791 (8
) 1,783
OTHER INCOME/(EXPENSE) Equity earnings in
unconsolidated entities 35 - 35 108 - 108 Interest expense, net (93
) (3 ) (96 ) (340 ) (9 ) (349 ) Other expense, net (1 )
- (1 ) (2 ) - (2 )
INCOME BEFORE TAX 471 (6 ) 465 1,557 (17 ) 1,540
Current income tax expense (9 ) - (9 ) (71 ) - (71 ) Deferred
income tax expense (72 ) (14 ) (86 )
(100 ) (41 ) (141 )
NET INCOME 390 (20
) 370 1,386 (58 ) 1,328 Net income attributable to noncontrolling
interests (1 ) (345 ) (346 ) (2 )
(1,256 ) (1,258 )
NET INCOME ATTRIBUTABLE TO
PAGP $ 389 $ (365 ) $ 24 $ 1,384 $ (1,314
) $ 70
BASIC NET INCOME PER CLASS A
SHARE $ 0.14 $ 0.48
DILUTED NET INCOME
PER CLASS A SHARE $ 0.13 $ 0.47
BASIC
WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING 172
145
DILUTED WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING 650 650 (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)
December 31, 2014 PAA
Consolidating
Adjustments (1)
PAGP ASSETS Current assets $ 4,179 $ 2 $ 4,181
Property and equipment, net 12,272 20 12,292 Goodwill 2,465 - 2,465
Investments in unconsolidated entities 1,735 - 1,735 Deferred tax
asset - 1,705 1,705 Linefill and base gas 930 - 930 Long-term
inventory 186 - 186 Other, net 489 -
489 Total assets $ 22,256 $ 1,727 $ 23,983
LIABILITIES AND PARTNERS' CAPITAL Current liabilities $
4,755 $ 1 $ 4,756 Senior notes, net of unamortized discount 8,757 -
8,757 Other long-term debt 5 536 541 Other long-term liabilities
and deferred credits 548 - 548 Total
liabilities 14,065 537 14,602 Partners' capital excluding
noncontrolling interests 8,133 (6,476 ) 1,657 Noncontrolling
interests 58 7,666 7,724 Total
partners' capital 8,191 1,190 9,381
Total liabilities and partners' capital $ 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)
Q4 2014 PAGP
DISTRIBUTION SUMMARY
(in millions, except per unit and per share data)
Q4 2014(1)
PAA Distribution/LP Unit $ 0.6750 GP Distribution/LP Unit $ 0.3614
Total Distribution/LP Unit $ 1.0364 PAA LP
Units Outstanding at 1/30/15 376 Gross GP Distribution $ 141
Less: IDR Reduction (6 ) Net Distribution from PAA to AAP
(2) $ 136 Less: Debt Service (2 ) Less: G&A Expense (1 )
Cash Available for Distribution by AAP $ 133
Distributions to AAP Partners Direct AAP Owners & AAP
Management (68.2% economic interest) $ 91 PAGP (31.8% economic
interest) 42 Total distributions to AAP Partners $
133 Distribution to PAGP Investors $ 42 PAGP
Class A Shares Outstanding at 1/30/15 207 PAGP
Distribution/Class A Share $ 0.20300
(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, 2014 December 31,
2014 Basic Net Income per Class A Share Net income
attributable to PAGP $ 24 $ 70 Basic weighted average Class A
shares outstanding 172 145 Basic net income per Class A
share $ 0.14 $ 0.48
Diluted Net Income per Class A
Share Numerator for diluted net income per Class A share: Net
income attributable to PAGP $ 24 $ 70
Incremental net income attributable to
PAGP resulting from assumed conversion of AAP units and AAP
Management units
58 235 Total $ 82 $ 305 Denominator for
diluted net income per Class A share: Basic weighted average number
of Class A shares outstanding 172 145 Dilutive shares resulting
from assumed conversion of AAP units and AAP Management units 478
505 Effect of dilutive securities: Weighted average LTIP shares (1)
- - Diluted weighted average number of Class A shares
outstanding 650 650 Diluted net income per Class A share $
0.13 $ 0.47 (1) As of December 31, 2014, there were less
than 0.1 million weighted average dilutive LTIP shares outstanding.
Plains All American Pipeline, L.P. and Plains GP HoldingsRyan
Smith, (866) 809-1291Director, Investor RelationsorAl Swanson,
(800) 564-3036Executive Vice President, CFO
Plains All American Pipe... (NYSE:PAA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Plains All American Pipe... (NYSE:PAA)
Historical Stock Chart
From Apr 2023 to Apr 2024