Plains All American Pipeline, L.P. (NYSE:PAA) and Plains GP
Holdings (NYSE:PAGP) today reported third-quarter 2015 results.
Plains All American Pipeline, L.P.
Summary Financial
Information (1) (unaudited)
(in millions, except per unit data)
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014 %
Change
2015 2014 %
Change
Net income attributable to PAA $ 249 $ 323 (23 )% $ 657 $
994 (34 )%
Diluted net income per limited partner
unit $ 0.24 $ 0.52 (54 )% $ 0.53 $ 1.70 (69 )%
Diluted weighted average limited partner units outstanding
399 371 8 % 395 367 8 %
EBITDA $ 483 $ 526 (8 )% $
1,364 $ 1,625 (16 )%
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014 %
Change
2015 2014 %
Change
Adjusted net income attributable to PAA $ 262 $ 325 (19 )% $
887 $ 985 (10 )%
Diluted adjusted net income per limited
partner unit $ 0.28 $ 0.53 (47 )% $ 1.11 $ 1.68 (34 )%
Adjusted EBITDA $ 497 $ 527 (6 )% $ 1,605 $ 1,606 - %
Distribution per limited partner unit declared for the
period $ 0.700 $ 0.660 6.1 %
(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 third quarter results with adjusted EBITDA of $497
million, which was $17 million above the mid-point of our quarterly
guidance range,” said Greg Armstrong, Chairman and CEO of Plains
All American. “PAA will pay a quarterly distribution of $0.70 per
limited partner unit next week, which is the equivalent of $2.80
per unit on an annualized basis, while PAGP will pay a quarterly
distribution of $0.231 per Class A share, or $0.924 per share on an
annualized basis. These distributions represent a 6.1% and 21.1%
increase over comparative distributions paid in the same quarter of
2014, respectively.
“We remain constructive on the intermediate to long-term outlook
for crude oil prices, activity levels, and PAA’s growth prospects.
In the near term we remain cautious due to the impacts of excess
capacity and related competitive pressures, and our fourth quarter
guidance reflects our most current view of the near term
environment,” said Armstrong. “PAA has a solid financial position
with over $3 billion of liquidity and numerous capital projects
scheduled to come on line or ramp up activity levels over the next
18 months that will contribute meaningfully to our cash flow.
Accordingly, we believe PAA is well positioned to manage through
the near term challenges and prosper over the intermediate to long
term.”
The following table summarizes selected PAA financial
information by segment for the third quarter and nine months ending
September 30, 2015:
Summary of
Selected Financial Data by Segment (1) (unaudited)
(in millions)
Three Months Ended Three Months Ended
September 30, 2015 September 30, 2014
Transportation Facilities Supply and
Logistics
Transportation Facilities Supply and
Logistics
Reported segment profit $ 254 $ 146 $ 87 $ 231 $ 147 $ 152
Selected items impacting comparability of segment profit (2)
(1 ) 2 8 6 2 (11 )
Adjusted segment profit $ 253
$ 148 $ 95 $
237 $ 149 $ 141
Percentage change in adjusted segment profit versus 2014
period 7 % (1 )%
(33 )% Nine Months Ended
Nine Months Ended September 30, 2015 September 30,
2014 Transportation Facilities Supply and
Logistics
Transportation Facilities Supply and
Logistics
Reported segment profit $ 681 $ 432 $ 258 $ 658 $ 435 $ 534
Selected items impacting comparability of segment profit (2)
74 7 152 22 11
(55 )
Adjusted segment profit $
755 $ 439 $ 410
$ 680 $ 446 $ 479
Percentage change in adjusted segment profit
versus 2014 period 11 % (2
)% (14 )%
(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.
Third-quarter 2015 Transportation adjusted segment profit
increased by 7% over comparable 2014 results. This increase was
driven by higher crude oil pipeline volumes associated with our
Cactus pipeline and other recently completed organic growth
projects primarily within the Permian Basin and Eagle Ford
producing regions, earnings from our 50% interest in the BridgeTex
pipeline and lower field operating costs. These increases were
partially offset by lost revenues associated with the shutdown of
our All American system in California, lower pipeline loss
allowance revenues and the impact of a weaker Canadian dollar.
Third-quarter 2015 Facilities adjusted segment profit decreased
by 1% versus comparable 2014 results. This decrease was primarily
due to a less favorable Canadian dollar and a less favorable
environment for both our rail and natural gas storage activities,
which was partially offset by lower field operating costs.
Third-quarter 2015 Supply and Logistics adjusted segment profit
exceeded the high end of our quarterly guidance range but decreased
by 33% compared to 2014 results. This decrease was primarily driven
by lower margins and volumes associated with our crude oil lease
gathering activities due to less favorable crude oil market
conditions, partially offset by higher margins in our NGL sales
activities, which benefitted from a stronger US dollar.
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:
Q3 2015 Q2 2015 Q3 2014 Distribution per
Class A share declared for the period $ 0.231 $ 0.227 $
0.19075
Q3 2015 distribution percentage growth from prior
periods 1.8 % 21.1 %
Conference Call
PAA and PAGP will hold a conference call on November 4, 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 fourth 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. EST
on Wednesday, November 4, 2015 to discuss the following items:
1. PAA's third-quarter 2015 performance;
2. The status of major organic growth projects;
3. Capitalization and liquidity;
4. Financial and operating guidance for the fourth 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) 234-9959. 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 365414. The replay will be available
beginning Wednesday, November 4, 2015, at approximately
1:00 p.m. EST and will continue until 11:59 p.m. EST on
December 4, 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 assets,
whether due to declines in production from existing oil and gas
reserves, failure to develop or slowdown in the development of
additional oil and gas reserves, whether from reduced cash flow to
fund drilling or the inability to access capital, or other factors;
the effects of competition; unanticipated changes in crude oil
market structure, grade differentials and volatility (or lack
thereof); environmental liabilities or events that are not covered
by an indemnity, insurance or existing reserves; fluctuations in
refinery capacity in areas supplied by our mainlines and other
factors affecting demand for various grades of crude oil, refined
products and natural gas and resulting changes in pricing
conditions or transportation throughput requirements; the
occurrence of a natural disaster, catastrophe, terrorist attack or
other event, including attacks on our electronic and computer
systems; tightened capital markets or other factors that increase
our cost of capital or limit our ability to obtain debt or equity
financing on satisfactory terms to fund additional acquisitions,
expansion projects, working capital requirements and the repayment
or refinancing of indebtedness; the currency exchange rate of the
Canadian dollar; continued creditworthiness of, and performance by,
our counterparties, including financial institutions and trading
companies with which we do business; maintenance of our credit
rating and ability to receive open credit from our suppliers and
trade counterparties; weather interference with business operations
or project construction, including the impact of extreme weather
events or conditions; the availability of, and our ability to
consummate, acquisition or combination opportunities; the
successful integration and future performance of acquired assets or
businesses and the risks associated with operating in lines of
business that are distinct and separate from our historical
operations; increased costs, or lack of availability, of insurance;
non-utilization of our assets and facilities; the effectiveness of
our risk management activities; shortages or cost increases of
supplies, materials or labor; the impact of current and future
laws, rulings, governmental regulations, accounting standards and
statements and related interpretations; fluctuations in the debt
and equity markets, including the price of our units at the time of
vesting under our long-term incentive plans; risks related to the
development and operation of our assets, including our ability to
satisfy our contractual obligations to our customers; inability to
recognize current revenue attributable to deficiency payments
received from customers who fail to ship or move more than minimum
contracted volumes until the related credits expire or are used;
factors affecting demand for natural gas and natural gas storage
services and rates; general economic, market or business conditions
and the amplification of other risks caused by volatile financial
markets, capital constraints and pervasive liquidity concerns; and
other factors and uncertainties inherent in the transportation,
storage, terminalling and marketing of crude oil and refined
products, as well as in the storage of natural gas and the
processing, transportation, fractionation, storage and marketing of
natural gas liquids as discussed in the Partnerships' filings with
the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil,
natural gas liquids ("NGL"), natural gas and refined products. PAA
owns an extensive network of pipeline transportation, terminalling,
storage and gathering assets in key crude oil and NGL producing
basins and transportation corridors and at major market hubs in the
United States and Canada. On average, PAA handles over 4.4 million
barrels per day of crude oil and NGL in its Transportation segment.
PAA is headquartered in Houston, Texas.
Plains GP Holdings is a publicly traded entity that owns an
interest in the general partner and incentive distribution rights
of Plains All American Pipeline, L.P., one of the largest energy
infrastructure and logistics companies in North America. PAGP is
headquartered in Houston, Texas.
PLAINS ALL AMERICAN PIPELINE, L.P.
AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per unit data)
Three Months
Ended Nine Months Ended September 30,
September 30, 2015 2014 2015
2014 REVENUES $ 5,551 $ 11,127 $ 18,156 $
34,005
COSTS AND EXPENSES Purchases and related costs
4,701 10,166 15,591 31,116 Field operating costs 348 382 1,111
1,078 General and administrative expenses 60 78 217 257
Depreciation and amortization 109 97
326 293 Total costs and expenses 5,218
10,723 17,245 32,744
OPERATING INCOME 333 404 911
1,261
OTHER INCOME/(EXPENSE) Equity earnings in
unconsolidated entities 45 29 134 73 Interest expense, net (107 )
(85 ) (313 ) (246 ) Other expense, net (4 ) (4 )
(7 ) (2 )
INCOME BEFORE TAX 267 344 725
1,086 Current income tax expense (11 ) (10 ) (72 ) (62 ) Deferred
income tax (expense)/benefit (6 ) (10 ) 6
(28 )
NET INCOME 250 324 659 996 Net
income attributable to noncontrolling interests (1 )
(1 ) (2 ) (2 )
NET INCOME ATTRIBUTABLE TO PAA
$ 249 $ 323 $ 657 $ 994
NET
INCOME ATTRIBUTABLE TO PAA: LIMITED PARTNERS $ 99
$ 195 $ 215 $ 630
GENERAL PARTNER $ 150
$ 128 $ 442 $ 364
BASIC NET
INCOME PER LIMITED PARTNER UNIT $ 0.25 $ 0.52 $
0.54 $ 1.71
DILUTED NET INCOME PER LIMITED
PARTNER UNIT $ 0.24 $ 0.52 $ 0.53 $ 1.70
BASIC WEIGHTED AVERAGE LIMITED PARTNER UNITS
OUTSTANDING 398 370 393
365
DILUTED WEIGHTED AVERAGE LIMITED
PARTNER UNITS OUTSTANDING 399 371
395 367
ADJUSTED
RESULTS
(in millions, except per unit data)
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014 2015 2014 ADJUSTED
NET INCOME ATTRIBUTABLE TO PAA $ 262 $ 325 $ 887
$ 985
DILUTED ADJUSTED NET INCOME PER
LIMITED PARTNER UNIT $ 0.28 $ 0.53 $ 1.11
$ 1.68
ADJUSTED EBITDA $ 497 $ 527
$ 1,605 $ 1,606
PLAINS
ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES FINANCIAL
SUMMARY (unaudited)
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(in millions)
September 30, December 31, 2015
2014 ASSETS Current assets $ 2,958 $ 4,179 Property
and equipment, net 13,350 12,272 Goodwill 2,417 2,465 Investments
in unconsolidated entities 1,954 1,735 Linefill and base gas 910
930 Long-term inventory 166 186 Other long-term assets, net
462 489 Total assets $ 22,217 $ 22,256
LIABILITIES AND PARTNERS' CAPITAL Current
liabilities $ 3,478 $ 4,755 Senior notes, net of unamortized
discount 9,757 8,757 Other long-term debt 213 5 Other long-term
liabilities and deferred credits 553 548
Total liabilities 14,001 14,065 Partners' capital
excluding noncontrolling interests 8,158 8,133 Noncontrolling
interests 58 58 Total partners' capital
8,216 8,191 Total liabilities and
partners' capital $ 22,217 $ 22,256
DEBT
CAPITALIZATION RATIOS
(in millions)
September 30, December 31, 2015
2014 Short-term debt $ 681 $ 1,287 Long-term debt
9,970 8,762 Total debt $ 10,651 $
10,049 Long-term debt $ 9,970 $ 8,762 Partners'
capital 8,216 8,191 Total book
capitalization $ 18,186 $ 16,953 Total book
capitalization, including short-term debt $ 18,867 $ 18,240
Long-term debt-to-total book capitalization 55 % 52 %
Total debt-to-total book capitalization, including short-term debt
56 % 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
September 30, 2015 September 30, 2014 Supply
and Supply and Transportation Facilities
Logistics Transportation Facilities
Logistics Revenues (1) $ 401 $ 263 $ 5,254 $ 424 $ 281 $
10,793 Purchases and related costs (1) (26 ) (7 ) (5,032 ) (38 ) (9
) (10,488 ) Field operating costs (1) (2) (147 ) (96 ) (110 ) (153
) (104 ) (122 ) Equity-indexed compensation (expense)/benefit -
operations 1 1 - (4 ) (1 ) - Segment general and administrative
expenses (2) (3) (23 ) (17 ) (26 ) (20 ) (16 ) (25 ) Equity-indexed
compensation (expense)/benefit - general and administrative 3 2 1
(7 ) (4 ) (6 ) Equity earnings in unconsolidated entities 45
- - 29 -
- Reported segment profit $ 254 $ 146 $ 87 231
147 152 Selected items impacting comparability of segment profit
(4) (1 ) 2 8 6
2 (11 ) Adjusted segment profit $ 253 $
148 $ 95 $ 237 $ 149 $ 141
Maintenance capital $ 34 $ 16 $ 2 $ 35
$ 19 $ 2
Nine Months Ended
Nine Months Ended September 30, 2015 September 30,
2014 Supply and Supply and Transportation
Facilities Logistics Transportation
Facilities Logistics Revenues (1) $ 1,203 $ 789 $
17,238 $ 1,222 $ 858 $ 33,021 Purchases and related costs (1) (85 )
(17 ) (16,553 ) (116 ) (47 ) (32,041 ) Field operating costs (1)
(2) (493 ) (284 ) (338 ) (419 ) (307 ) (340 ) Equity-indexed
compensation (expense)/benefit - operations (5 ) (1 ) - (14 ) (4 )
(2 ) Segment general and administrative expenses (2) (3) (67 ) (50
) (79 ) (62 ) (46 ) (79 ) Equity-indexed compensation
(expense)/benefit - general and administrative (6 ) (5 ) (10 ) (26
) (19 ) (25 ) Equity earnings in unconsolidated entities 134
- - 73 -
- Reported segment profit $ 681 $ 432 $ 258 $
658 $ 435 $ 534 Selected items impacting comparability of segment
profit (4) 74 7 152
22 11 (55 ) Adjusted segment
profit $ 755 $ 439 $ 410 $ 680 $ 446
$ 479 Maintenance capital $ 101 $ 48
$ 5 $ 111 $ 34 $ 6 (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 Nine Months Ended September
30, September 30, 2015 2014 2015
2014 Transportation segment (average daily volumes
in thousands of barrels per day): Tariff activities Crude Oil
Pipelines All American - 40 18 37 Bakken Area Systems (2) 141 164
146 147 Basin / Mesa / Sunrise 815 743 831 734 BridgeTex 100 - 105
- Cactus 110 - 58 - Capline 181 178 167 142 Eagle Ford Area Systems
(2) 321 247 298 215 Line 63 / Line 2000 121 126 121 119 Manito 43
44 48 44 Mid-Continent Area Systems 342 354 356 350 Permian Basin
Area Systems 860 776 817 765 Rainbow 109 104 114 111 Rangeland 58
61 59 65 Salt Lake City Area Systems (2) 155 140 136 134 South
Saskatchewan 59 62 62 61 White Cliffs 41 33 43 27 Other 777 823 752
737 NGL Pipelines Co-Ed 51 57 56 56 Other 149 143 139 127 Tariff
activities total 4,433 4,095 4,326 3,871 Trucking 112 131 114 129
Transportation segment total 4,545 4,226 4,440 4,000
Facilities segment (average monthly volumes): Crude oil,
refined products and NGL terminalling and storage
(average monthly capacity in millions of
barrels)
100 95 99 95 Rail load / unload volumes
(average volumes in thousands of barrels
per day)
231 241 223 232 Natural gas storage
(average monthly working capacity in
billions of cubic feet)
97 97 97 97 NGL fractionation
(average volumes in thousands of barrels
per day)
98 104 101 94 Facilities segment total
(average monthly volumes in millions of
barrels) (3)
126 121 126 121
Supply and Logistics segment (average
daily volumes in thousands of barrels per day): Crude oil lease
gathering purchases 927 971 958 932 NGL sales 183 153 209 188
Waterborne cargos 4 - 1 - Supply and Logistics segment total 1,114
1,124 1,168 1,120
(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) Area systems include volumes (attributable to our interest)
from our investments in unconsolidated entities.
(3) Facilities segment total is calculated
as the sum of: (i) crude oil, refined products and NGL terminalling
and storage capacity; (ii) rail load and unload volumes multiplied
by the number of days in the period and divided by the number of
months in the period; (iii) natural gas storage working capacity
divided by 6 to account for the 6:1 mcf of natural gas to crude Btu
equivalent ratio and further divided by 1,000 to convert to monthly
volumes in millions; and (iv) NGL fractionation volumes multiplied
by the number of days in the period and divided by the number of
months in
the period.
PLAINS ALL AMERICAN PIPELINE,
L.P. AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
COMPUTATION OF
BASIC AND DILUTED NET INCOME PER LIMITED PARTNER
UNIT
(in millions, except per unit data)
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014
2015 2014 Basic Net Income
per Limited Partner Unit Net income attributable to PAA $ 249 $
323 $ 657 $ 994 Less: General partner's incentive distribution (1)
(148 ) (124 ) (437 ) (351 ) Less: General partner 2% ownership (1)
(2 ) (4 ) (5 ) (13 ) Net income
attributable to limited partners 99 195 215 630 Less: Undistributed
earnings allocated and distributions to participating securities
(1) (1 ) (1 ) (4 ) (5 ) Net income
attributable to limited partners in accordance with application of
the two-class method for MLPs $ 98 $ 194 $ 211
$ 625 Basic weighted average limited partner units
outstanding 398 370 393 365 Basic net income per limited
partner unit $ 0.25 $ 0.52 $ 0.54 $ 1.71
Diluted Net Income per Limited Partner Unit
Net income attributable to PAA $ 249 $ 323 $ 657 $ 994 Less:
General partner's incentive distribution (1) (148 ) (124 ) (437 )
(351 ) Less: General partner 2% ownership (1) (2 ) (4
) (5 ) (13 ) Net income attributable to limited
partners 99 195 215 630 Less: Undistributed earnings allocated and
distributions to participating securities (1) (1 ) (1
) (4 ) (5 ) Net income attributable to limited
partners in accordance with application of the two-class method for
MLPs $ 98 $ 194 $ 211 $ 625
Basic weighted average limited partner units outstanding 398 370
393 365 Effect of dilutive securities: Weighted average LTIP units
(2) 1 1 2 2
Diluted weighted average limited partner units outstanding
399 371 395 367
Diluted net income per limited partner unit $ 0.24 $
0.52 $ 0.53 $ 1.70
(1) We calculate net income attributable
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
Nine Months Ended September 30, September 30,
2015 2014 2015 2014 Selected Items
Impacting Comparability - Income/(Loss) (1):
Gains/(losses) from derivative activities net of inventory
valuation adjustments (2) $ 39 $ 27 $ (112 ) $ 77 Long-term
inventory costing adjustments (3) (47 ) - (62 ) - Equity-indexed
compensation expense (4) - (12 ) (22 ) (48 ) Net gain/(loss) on
foreign currency revaluation (6 ) (16 ) 20 (10 ) Line 901 incident
- - (65 ) - Deferred income tax expense (5) - - (22 ) - Tax effect
on selected items impacting comparability 1 (1
) 33 (10 ) Selected items impacting
comparability of net income attributable to PAA $ (13 ) $ (2 ) $
(230 ) $ 9 Impact to basic net income per limited
partner unit $ (0.03 ) $ (0.01 ) $ (0.57 ) $ 0.02 Impact to
diluted net income per limited partner unit $ (0.04 ) $ (0.01 ) $
(0.58 ) $ 0.02 (1) Certain of our non-GAAP financial
measures may not be impacted by each of the selected items
impacting comparability.
(2) Includes mark-to-market and other
gains and losses resulting from derivative instruments that are
related to underlying activities in another period (or the reversal
of mark-to-market gains and losses from a prior period), gains and
losses on derivatives that are related to investing activities
(such as the purchase of linefill) and inventory valuation
adjustments, as applicable.
(3) Includes the impact of changes in the
average cost of long-term inventory that result from fluctuations
in market prices and writedowns of such inventory that result from
price declines. Long-term inventory consists of minimum working
inventory requirements in third-party assets and other working
inventory needed for our commercial operations. We consider this
inventory necessary to conduct our operations and we intend to
carry this inventory for the foreseeable future. Therefore, we
classify this inventory as long-term on our balance sheet and do
not hedge the inventory with derivative instruments (similar to
Linefill in our own assets). 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.
(5) Includes the initial cumulative effect of the recent change in
Canadian tax legislation.
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
COMPUTATION OF
ADJUSTED BASIC AND DILUTED EARNINGS PER LIMITED PARTNER
UNIT
(in millions, except per unit data)
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014 2015 2014 Basic Adjusted
Net Income per Limited Partner Unit Net income attributable to
PAA $ 249 $ 323 $ 657 $ 994 Selected items impacting comparability
of net income attributable to PAA (1) 13 2
230 (9 ) Adjusted net income
attributable to PAA 262 325 887 985 Less: General partner's
incentive distribution (2) (148 ) (124 ) (437 ) (351 ) Less:
General partner 2% ownership (2) (3 ) (4 ) (9
) (12 ) Adjusted net income attributable to limited partners
111 197 441 622 Less: Undistributed earnings allocated and
distributions to participating securities (2) (1 ) (1
) (4 ) (5 ) Adjusted limited partners' net income $
110 $ 196 $ 437 $ 617 Basic
weighted average limited partner units outstanding 398 370 393 365
Basic adjusted net income per limited partner unit $ 0.28
$ 0.53 $ 1.11 $ 1.69
Diluted
Adjusted Net Income per Limited Partner Unit Net income
attributable to PAA $ 249 $ 323 $ 657 $ 994 Selected items
impacting comparability of net income attributable to PAA (1)
13 2 230 (9 )
Adjusted net income attributable to PAA 262 325 887 985 Less:
General partner's incentive distribution (2) (148 ) (124 ) (437 )
(351 ) Less: General partner 2% ownership (2) (3 ) (4
) (9 ) (12 ) Adjusted net income attributable to
limited partners 111 197 441 622 Less: Undistributed earnings
allocated and distributions to participating securities (2)
(1 ) (1 ) (4 ) (5 ) Adjusted limited partners'
net income $ 110 $ 196 $ 437 $ 617
Diluted weighted average limited partner units outstanding
399 371 395 367 Diluted adjusted net income per limited
partner unit $ 0.28 $ 0.53 $ 1.11 $ 1.68
(1) Certain of our non-GAAP financial measures may
not be impacted by each of the selected items impacting
comparability.
(2) We calculate adjusted net income
attributable to 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 Nine Months Ended
September 30, September 30, 2015 2014
2015 2014 Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") and
Excluding Selected Items Impacting
Comparability ("Adjusted EBITDA") Reconciliations
Net Income $ 250 $ 324 $ 659 $ 996 Add: Interest expense, net 107
85 313 246 Add: Income tax expense 17 20 66 90 Add: Depreciation
and amortization 109 97 326
293 EBITDA $ 483 $ 526 $ 1,364 $ 1,625
Selected items impacting comparability of EBITDA (1) 14
1 241 (19 ) Adjusted
EBITDA $ 497 $ 527 $ 1,605 $ 1,606
(1) Certain of our non-GAAP financial measures may not be
impacted by each of the selected items impacting comparability.
Three Months Ended Nine Months Ended
September 30, September 30, 2015 2014
2015 2014 Adjusted EBITDA to Implied Distributable
Cash Flow ("DCF") Reconciliation Adjusted EBITDA $ 497 $ 527 $
1,605 $ 1,606 Interest expense, net (107 ) (85 ) (313 ) (246 )
Maintenance capital (52 ) (56 ) (154 ) (151 ) Current income tax
expense (11 ) (10 ) (72 ) (62 ) Equity earnings in unconsolidated
entities, net of distributions 12 (6 ) 25 1 Distributions to
noncontrolling interests (1) (1 ) (1 ) (3 )
(3 ) Implied DCF (2) $ 338 $ 369 $ 1,088
$ 1,145 (1) Includes distributions that
pertain to the current period's net income, which are paid in the
subsequent period. (2) Including costs of $65 million related to
our Line 901 incident that occurred during May 2015, Implied DCF
would have been $1,023 million for the nine months ended September
30, 2015.
Three Months Ended Nine Months Ended
September 30, September 30, 2015 2014
2015 2014 Net Cash Provided by Operating
Activities Reconciliation EBITDA $ 483 $ 526 $ 1,364 $ 1,625
Current income tax expense (11 ) (10 ) (72 ) (62 ) Interest
expense, net (107 ) (85 ) (313 ) (246 ) Net change in assets and
liabilities, net of acquisitions 205 (138 ) 216 (129 ) Other items
to reconcile to net cash provided by operating activities:
Equity-indexed compensation expense/(benefit) (8 ) 22
27 90 Net cash provided by
operating activities $ 562 $ 315 $ 1,222 $
1,278
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 September 30, 2015
September 30, 2014 PAA Consolidating
Adjustments (1)
PAGP PAA Consolidating
Adjustments (1)
PAGP REVENUES $ 5,551 $ - $ 5,551 $ 11,127 $ -
$ 11,127
COSTS AND EXPENSES Purchases and related
costs 4,701 - 4,701 10,166 - 10,166 Field operating costs 348 - 348
382 - 382 General and administrative expenses 60 - 60 78 1 79
Depreciation and amortization 109 1
110 97 - 97
Total costs and expenses 5,218 1 5,219 10,723 1 10,724
OPERATING INCOME 333 (1 ) 332 404 (1 ) 403
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 45
- 45 29 - 29 Interest expense, net (107 ) (3 ) (110 ) (85 ) (3 )
(88 ) Other expense, net (4 ) - (4 )
(4 ) - (4 )
INCOME BEFORE
TAX 267 (4 ) 263 344 (4 ) 340 Current income tax expense (11 )
- (11 ) (10 ) - (10 ) Deferred income tax expense (6 )
(18 ) (24 ) (10 ) (9 ) (19 )
NET INCOME 250 (22 ) 228 324 (13 ) 311 Net income
attributable to noncontrolling interests (1 ) (195 )
(196 ) (1 ) (294 ) (295 )
NET INCOME
ATTRIBUTABLE TO PAGP $ 249 $ (217 ) $ 32 $ 323
$ (307 ) $ 16
BASIC AND DILUTED NET
INCOME PER CLASS A SHARE $ 0.14 $ 0.12
BASIC AND DILUTED WEIGHTED AVERAGE CLASS A SHARES
OUTSTANDING 225 136 (1)
Represents the aggregate consolidating adjustments necessary to
produce consolidated financial statements for PAGP.
PLAINS GP HOLDINGS AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions, except per share data)
Nine Months
Ended Nine Months Ended September 30, 2015
September 30, 2014 PAA Consolidating
Adjustments (1)
PAGP PAA Consolidating
Adjustments (1)
PAGP REVENUES $ 18,156 $ - $ 18,156 $ 34,005 $
- $ 34,005
COSTS AND EXPENSES Purchases and related
costs 15,591 - 15,591 31,116 - 31,116 Field operating costs 1,111 -
1,111 1,078 - 1,078 General and administrative expenses 217 2 219
257 3 260 Depreciation and amortization 326 1
327 293 1
294 Total costs and expenses 17,245 3 17,248 32,744 4 32,748
OPERATING INCOME 911 (3 ) 908 1,261 (4 ) 1,257
OTHER INCOME/(EXPENSE) Equity earnings in unconsolidated
entities 134 - 134 73 - 73 Interest expense, net (313 ) (9 ) (322 )
(246 ) (8 ) (254 ) Other expense, net (7 ) -
(7 ) (2 ) - (2 )
INCOME BEFORE TAX 725 (12 ) 713 1,086 (12 ) 1,074 Current
income tax expense (72 ) - (72 ) (62 ) - (62 ) Deferred income tax
(expense)/benefit 6 (54 ) (48 )
(28 ) (26 ) (54 )
NET INCOME 659 (66 )
593 996 (38 ) 958 Net income attributable to noncontrolling
interests (2 ) (498 ) (500 ) (2 )
(911 ) (913 )
NET INCOME ATTRIBUTABLE TO PAGP
$ 657 $ (564 ) $ 93 $ 994 $ (949 ) $ 45
BASIC AND DILUTED NET INCOME PER CLASS A SHARE
$ 0.42 $ 0.33
BASIC AND DILUTED WEIGHTED
AVERAGE CLASS A SHARES OUTSTANDING 220 136
(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)
September 30, 2015 December 31, 2014
PAA Consolidating
Adjustments (1)
PAGP PAA Consolidating
Adjustments (1)
PAGP ASSETS Current assets $ 2,958 $ 3 $ 2,961 $
4,179 $ 2 $ 4,181 Property and equipment, net 13,350 19 13,369
12,272 20 12,292 Goodwill 2,417 - 2,417 2,465 - 2,465 Investments
in unconsolidated entities 1,954 - 1,954 1,735 - 1,735 Deferred tax
asset - 1,849 1,849 - 1,705 1,705 Linefill and base gas 910 - 910
930 - 930 Long-term inventory 166 - 166 186 - 186 Other long-term
assets, net 462 - 462 489
- 489 Total assets $ 22,217 $ 1,871 $ 24,088 $
22,256 $ 1,727 $ 23,983
LIABILITIES AND PARTNERS'
CAPITAL Current liabilities $ 3,478 $ 2 $ 3,480 $ 4,755 $ 1 $
4,756 Senior notes, net of unamortized discount 9,757 - 9,757 8,757
- 8,757 Other long-term debt 213 559 772 5 536 541 Other long-term
liabilities and deferred credits 553 -
553 548 - 548 Total liabilities 14,001
561 14,562 14,065 537 14,602 Partners' capital excluding
noncontrolling interests 8,158 (6,361 ) 1,797 8,133 (6,476 ) 1,657
Noncontrolling interests 58 7,671 7,729
58 7,666 7,724 Total partners' capital
8,216 1,310 9,526 8,191
1,190 9,381 Total liabilities and partners' capital $
22,217 $ 1,871 $ 24,088 $ 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)
Q3 2015 PAGP
DISTRIBUTION SUMMARY
(in millions, except per unit and per share data)
Q3 2015
(1) PAA Distribution/LP Unit $ 0.7000 GP Distribution/LP
Unit $ 0.3872 Total Distribution/LP Unit $ 1.0872
PAA LP Units Outstanding at 10/30/15 398 Gross GP
Distribution $ 160 Less: IDR Reduction (6 ) Net Distribution
from PAA to AAP (2) $ 154 Less: Debt Service (3 ) Less: G&A
Expense (1 ) Plus: Projected Cash Available 1 Cash
Available for Distribution by AAP $ 151
Distributions to AAP Partners Direct AAP Owners & AAP
Management (65% economic interest) $ 98 PAGP (35% economic
interest) 53 Total distributions to AAP Partners $
151 Distribution to PAGP Investors $ 52 PAGP
Class A Shares Outstanding at 10/30/15 227 PAGP
Distribution/Class A Share $ 0.231 (1)
Amounts may not recalculate due to rounding.
(2) Plains AAP, L.P. ("AAP") is the
general partner of PAA.
PLAINS GP HOLDINGS AND
SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
COMPUTATION OF
BASIC AND DILUTED NET INCOME PER CLASS A SHARE
(in millions, except per share data)
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014 2015 2014 Basic and
Diluted Net Income per Class A Share Net income attributable to
PAGP $ 32 $ 16 $ 93 $ 45 Basic and diluted weighted average Class A
shares outstanding 225 136 220 136 Basic and diluted net
income per Class A share $ 0.14 $ 0.12 $ 0.42 $ 0.33
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151103006914/en/
Plains All American Pipeline, L.P. and Plains GP HoldingsRyan
Smith, 866-809-1291Director, Investor RelationsAl Swanson,
800-564-3036Executive Vice President, CFO
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