Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP
Holdings (NYSE: PAGP) today reported first-quarter 2016
results.
Plains All American Pipeline,
L.P.
Summary Financial
Information (1) (unaudited)
(in millions, except per unit data)
Three Months Ended
March 31, 2016 2015 %
Change
Net income attributable to PAA
$ 202 $ 283 (29 )%
Diluted net income per common unit $ 0.07
$ 0.35 (80 )%
Diluted weighted average common units
outstanding 399 385 4 %
EBITDA $ 448 $ 509 (12 )%
Three Months Ended March 31,
2016 2015 %
Change
Adjusted net income attributable to PAA $ 355 $ 369 (4 )%
Diluted adjusted net income per common unit $ 0.45 $ 0.57
(21 )%
Adjusted EBITDA $ 621 $ 622 - %
Distribution per
common unit declared for the period $ 0.700 $ 0.685 2.2 %
(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 first-quarter adjusted EBITDA of $621 million,
which was approximately $51 million or 9% above the midpoint of our
first-quarter guidance,” said Greg Armstrong, Chairman and CEO of
Plains All American. “PAA’s results reflect a combination of
performance above expectations, the inclusion of deficiency amounts
for ship or pay obligations that have been billed or collected, and
some timing related items expected to reverse later in the
year.”
Armstrong added, “We are cautious over the near term as recent
drilling and completion activity is meaningfully below levels of
just a few months ago and what we anticipated in our initial 2016
guidance. These lower activity levels are starting to impact U.S.
oil production and, accordingly, we are revising our full-year 2016
midpoint guidance for adjusted EBITDA downward by approximately 4%
to $2.175 billion.
Importantly, PAA ended the first quarter of 2016 with $3.8
billion of committed liquidity and an improved balance sheet as a
result of the $1.6 billion preferred equity offering completed in
January. We believe PAA is well positioned to manage through
near-term challenges and to prosper over the intermediate to long
term as the industry recovers.”
The following table summarizes selected PAA financial
information by segment for the first quarter of 2016:
Summary of
Selected Financial Data by Segment (1)
(unaudited)
(in millions)
Three Months Ended Three Months Ended
March 31, 2016 March 31, 2015 Transportation
Facilities Supply and
Logistics
Transportation Facilities Supply and
Logistics
Reported segment profit $ 247 $ 159 $ 37 $ 241 $ 142 $ 130 Selected
items impacting comparability of segment profit (2) 22
8 147 5 2
101
Adjusted segment profit $ 269
$ 167 $ 184 $
246 $ 144 $ 231 Percentage
change in adjusted segment profit versus 2015 period
9 % 16 % (20
)%
(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 2016 Transportation adjusted segment profit
increased 9% over comparable 2015 results. This increase was
primarily driven by higher crude oil pipeline volumes associated
with our Cactus pipeline, which was placed into service in April
2015, and the expansion of our pipeline system in the Delaware
Basin. Such increases were partially offset by lower pipeline loss
allowance revenues.
First-quarter 2016 Facilities adjusted segment profit increased
by 16% over comparable 2015 results. This increase was primarily
due to an increase in capacity and higher utilization of our crude
oil storage facilities and lower operating expenses.
First-quarter 2016 Supply and Logistics adjusted segment profit
decreased by 20% as compared to 2015 results. This decrease was
primarily driven by lower volumes and margins associated with our
U.S. crude oil lease gathering due to crude oil production declines
in certain basins and the resulting increase in competitive
pressures for lease gathered barrels as well as lower margins from
our NGL sales activities. Such decreases were partially offset by
the benefit of contango storage opportunities.
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 2016 Q4 2015 Q1 2015 Distribution per
Class A share declared for the period $ 0.231 $ 0.231 $
0.222
Q1 2016 distribution percentage growth from prior
periods - % 4.1 %
Conference Call
PAA and PAGP will hold a conference call on May 5, 2016 (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 2016. 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. ET
on Thursday, May 5, 2016 to discuss the following items:
1. PAA's first-quarter 2016 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 2016; 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, under the “Investor Relations”
section of the website (Navigate to: Investor Relations / either
“PAA” or “PAGP” / News & Events / Quarterly Earnings).
Following the live webcast, an audio replay in MP3 format will be
available on the website within two hours after the end of the call
and will be accessible for a period of 365 days.
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. These measures may
further be adjusted to include amounts related to deficiencies
associated with minimum volume commitments whereby we have billed
the counterparties for their deficiency obligation and such amounts
are recognized as deferred revenue in “Accounts payable and accrued
liabilities” in our Condensed Consolidated Financial Statements.
Such amounts are presented net of applicable amounts subsequently
recognized into revenue. We have defined all such items as
“Selected Items Impacting Comparability.” Due to the nature of the
selected items, certain selected items impacting comparability may
impact certain non-GAAP financial measures, referred to as adjusted
results, but not impact other non-GAAP financial measures. 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 Condensed 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, declines in
the volume of crude oil, refined product and NGL shipped,
processed, purchased, stored, fractionated and/or gathered at or
through the use of our assets, whether due to declines in
production from existing oil and gas reserves, failure to develop
or slowdown in the development of additional oil and gas reserves,
whether from reduced cash flow to fund drilling or the inability to
access capital, or other factors; the effects of competition;
failure to implement or capitalize, or delays in implementing or
capitalizing, on expansion projects; unanticipated changes in crude
oil market structure, grade differentials and volatility (or lack
thereof); environmental liabilities or events that are not covered
by an indemnity, insurance or existing reserves; fluctuations in
refinery capacity in areas supplied by our mainlines and other
factors affecting demand for various grades of crude oil, refined
products and natural gas and resulting changes in pricing
conditions or transportation throughput requirements; the
occurrence of a natural disaster, catastrophe, terrorist attack or
other event, including attacks on our electronic and computer
systems; maintenance of our credit rating and ability to receive
open credit from our suppliers and trade counterparties; tightened
capital markets or other factors that increase our cost of capital
or limit our ability to obtain debt or equity financing on
satisfactory terms to fund additional acquisitions, expansion
projects, working capital requirements and the repayment or
refinancing of indebtedness; the currency exchange rate of the
Canadian dollar; continued creditworthiness of, and performance by,
our counterparties, including financial institutions and trading
companies with which we do business; inability to recognize current
revenue attributable to deficiency payments received from customers
who fail to ship or move more than minimum contracted volumes until
the related credits expire or are used; non-utilization of our
assets and facilities; increased costs, or lack of availability, of
insurance; weather interference with business operations or project
construction, including the impact of extreme weather events or
conditions; the availability of, and our ability to consummate,
acquisition or combination opportunities; the successful
integration and future performance of acquired assets or businesses
and the risks associated with operating in lines of business that
are distinct and separate from our historical operations; the
effectiveness of our risk management activities; shortages or cost
increases of supplies, materials or labor; the impact of current
and future laws, rulings, governmental regulations, accounting
standards and statements and related interpretations; fluctuations
in the debt and equity markets, including the price of our units at
the time of vesting under our long-term incentive plans; risks
related to the development and operation of our assets, including
our ability to satisfy our contractual obligations to our
customers; factors affecting demand for natural gas and natural gas
storage services and rates; general economic, market or business
conditions and the amplification of other risks caused by volatile
financial markets, capital constraints and pervasive liquidity
concerns; and other factors and uncertainties inherent in the
transportation, storage, terminalling and marketing of crude oil
and refined products, as well as in the storage of natural gas and
the processing, transportation, fractionation, storage and
marketing of natural gas liquids as discussed in the Partnerships'
filings with the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil,
natural gas liquids ("NGL"), natural gas and refined products. PAA
owns an extensive network of pipeline transportation, terminalling,
storage and gathering assets in key crude oil and NGL producing
basins and transportation corridors and at major market hubs in the
United States and Canada. On average, PAA handles over 4.6 million
barrels per day of crude oil and NGL in its Transportation segment.
PAA is headquartered in Houston, Texas.
Plains GP Holdings is a publicly traded entity that owns an
interest in the general partner and incentive distribution rights
of Plains All American Pipeline, L.P., one of the largest energy
infrastructure and logistics companies in North America. PAGP is
headquartered in Houston, Texas.
PLAINS ALL AMERICAN PIPELINE,
L.P. AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in millions, except per unit data)
Three Months Ended
March 31, 2016 2015 REVENUES $
4,111 $ 5,942
COSTS AND EXPENSES Purchases and
related costs 3,348 5,042 Field operating costs 300 346 General and
administrative expenses 67 78 Depreciation and amortization
114 104 Total costs and expenses 3,829 5,570
OPERATING INCOME 282 372
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 47
37 Interest expense, net (112 ) (105 ) Other income/(expense), net
5 (4 )
INCOME BEFORE TAX 222 300
Current income tax expense (31 ) (42 ) Deferred income tax benefit
12 26
NET INCOME 203 284
Net income attributable to noncontrolling interests (1 )
(1 )
NET INCOME ATTRIBUTABLE TO PAA $ 202 $
283
NET INCOME PER COMMON UNIT:
Net income attributable to common
unitholders -- Basic
$ 28 $ 136 Basic weighted average common units outstanding 398 383
Basic net income per common unit $ 0.07 $ 0.36
Net income attributable to common
unitholders -- Diluted
$ 28 $ 136 Diluted weighted average common units outstanding 399
385 Diluted net income per common unit $ 0.07 $ 0.35
(1) The 2015 periods have been
retroactively adjusted to reflect the reclassification of the
amortization of debt issuance costs from "Depreciation and
amortization" to "Interest expense, net" as a result of our
adoption of revised debt issuance costs guidance issued by the
FASB.
ADJUSTED
RESULTS
(in millions, except per unit data)
Three Months Ended
March 31, 2016 2015 ADJUSTED NET
INCOME ATTRIBUTABLE TO PAA $ 355 $ 369
DILUTED ADJUSTED NET INCOME PER COMMON UNIT $ 0.45 $
0.57
ADJUSTED EBITDA $ 621 $ 622
PLAINS ALL AMERICAN PIPELINE,
L.P. AND SUBSIDIARIES FINANCIAL SUMMARY (unaudited)
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
(in millions)
March 31, December 31, 2016
2015 ASSETS Current assets $ 2,780 $ 2,969 Property
and equipment, net 13,670 13,474 Goodwill 2,405 2,405 Investments
in unconsolidated entities 2,097 2,027 Linefill and base gas 899
898 Long-term inventory 112 129 Other long-term assets, net
334 386 Total assets $ 22,297 $ 22,288
LIABILITIES AND PARTNERS' CAPITAL Current
liabilities $ 3,063 $ 3,407 Senior notes, net of unamortized
discounts and debt issuance costs 9,126 9,698 Other long-term debt
27 677 Other long-term liabilities and deferred credits 710
567 Total liabilities 12,926 14,349
Partners' capital excluding noncontrolling interests 9,313 7,881
Noncontrolling interests 58 58 Total
partners' capital 9,371 7,939 Total
liabilities and partners' capital $ 22,297 $ 22,288
DEBT
CAPITALIZATION RATIOS
(in millions)
March 31, December 31, 2016
2015 Short-term debt $ 715 $ 999 Long-term debt 9,153
10,375 Total debt $ 9,868 $ 11,374
Long-term debt $ 9,153 $ 10,375 Partners' capital
9,371 7,939 Total book capitalization $
18,524 $ 18,314 Total book capitalization, including
short-term debt $ 19,239 $ 19,313 Long-term
debt-to-total book capitalization 49 % 57 % Total debt-to-total
book capitalization, including short-term debt 51 % 59 %
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, 2016 March 31, 2015 Supply and
Supply and Transportation Facilities
Logistics Transportation Facilities
Logistics Revenues (1) $ 383 $ 265 $ 3,821 $ 400 $ 257 $
5,634 Purchases and related costs (1) (21 ) (5 ) (3,677 ) (30 ) (4
) (5,353 ) Field operating costs (1) (2) (137 ) (85 ) (81 ) (136 )
(91 ) (118 )
Equity-indexed compensation expense -
operations
- - - (3 ) (1 ) (1 ) Segment general and administrative expenses
(2) (3) (23 ) (15 ) (25 ) (22 ) (15 ) (27 ) Equity-indexed
compensation expense - general and administrative (2 ) (1 ) (1 ) (5
) (4 ) (5 ) Equity earnings in unconsolidated entities 47
- - 37 -
- Reported segment profit $ 247 $ 159 $ 37 241
142 130 Selected items impacting comparability of segment profit
(4) 22 8 147 5
2 101 Adjusted segment profit $
269 $ 167 $ 184 $ 246 $ 144 $
231 Maintenance capital $ 35 $ 9 $ 3
$ 33 $ 15 $ 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, 2016 2015
Transportation segment (average daily volumes in
thousands of barrels per day): Volumes from tariff activities
Crude oil pipelines (by region): Permian Basin (2) 2,045 1,658
South Texas / Eagle Ford (2) 313 263 Western 175 268 Rocky Mountain
(2) 437 453 Gulf Coast 581 441 Central 379 435 Canada 394 414 Crude
oil pipelines 4,324 3,932 NGL pipelines 178 191 Total volumes from
tariff activities 4,502 4,123 Trucking 106 121 Transportation
segment total volumes 4,608 4,244
Facilities segment
(average monthly volumes): Crude oil, refined products and NGL
terminalling and storage (average monthly capacity in millions of
barrels) 105 99 Rail load / unload volumes (average volumes in
thousands of barrels per day) 91 206 Natural gas storage (average
monthly working capacity in billions of cubic feet) 97 97 NGL
fractionation (average volumes in thousands of barrels per day) 115
102 Facilities segment total volumes (average monthly volumes in
millions of barrels) ((3)) 127 124
Supply and Logistics
segment (average daily volumes in thousands of barrels per
day): Crude oil lease gathering purchases 913 981 NGL sales 308
286 Waterborne cargos 7 - Supply and Logistics segment total
volumes 1,228 1,267
(1)
Average volumes are calculated as total
volumes for the period (attributable to our interest) divided by
the number of days or months in the period.
(2)
Region includes volumes (attributable to
our interest) from pipelines owned by 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 COMMON UNIT
(in millions, except per unit data)
Three Months Ended
March 31, 2016 2015 Basic Net Income per
Common Unit Net income attributable to PAA $ 202 $ 283 Less:
Distributions to Series A preferred units (1) (23 ) - Less:
Distributions to general partner (1) (155 ) (148 ) Less:
Distributions to participating securities (1) (1 ) (2 ) Less:
Undistributed loss allocated to general partner (1) 5
3 Net income attributable to common unitholders in
accordance with application of the two-class method for MLPs $ 28
$ 136 Basic weighted average common units
outstanding 398 383 Basic net income per common unit $ 0.07
$ 0.36
Diluted Net Income per Common
Unit Net income attributable to PAA $ 202 $ 283 Less:
Distributions to Series A preferred units (1) (23 ) - Less:
Distributions to general partner (1) (155 ) (148 ) Less:
Distributions to participating securities (1) (1 ) (2 ) Less:
Undistributed loss allocated to general partner (1) 5
3 Net income attributable to common unitholders in
accordance with application of the two-class method for MLPs $ 28
$ 136 Basic weighted average common units
outstanding 398 383 Effect of dilutive securities: Weighted average
LTIP units (2) 1 2 Diluted weighted
average common units outstanding 399 385
Diluted net income per common unit (3) $ 0.07
$ 0.35
(1)
We calculate net income attributable to
common unitholders 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, common unitholders 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.
(3)
The Series A preferred units were excluded
from the calculation of diluted net income per common unit as the
effect was antidilutive.
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, 2016 2015
Selected Items Impacting
Comparability(1):
Gains/(losses) from derivative activities net of inventory
valuation adjustments (2) $ (122 ) $ (91 ) Deficiencies under
minimum volume commitments, net (3) (27 ) - Long-term inventory
costing adjustments (4) (23 ) (38 ) Equity-indexed compensation
expense (5) (4 ) (11 ) Net gain on foreign currency revaluation 3
27 Tax effect on selected items impacting comparability 20
27 Selected items impacting comparability of
net income attributable to PAA $ (153 ) $ (86 ) Impact to
basic net income per common unit $ (0.38 ) $ (0.22 ) Impact to
diluted net income per common unit $ (0.38 ) $ (0.22 )
(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 amounts billed to
counterparties for their deficiency obligation under agreements
with minimum volume commitments, net of applicable amounts
subsequently
recognized into revenue.
(4)
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).
(5)
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 NET INCOME PER COMMON
UNIT
(in millions, except per unit data)
Three Months Ended
March 31, 2016 2015 Basic Adjusted Net
Income per Common Unit Net income attributable to PAA $ 202 $
283 Selected items impacting comparability of net income
attributable to PAA (1) 153 86 Adjusted
net income attributable to PAA 355 369 Less: Distributions to
Series A preferred units (2) (23 ) - Less: Distributions to general
partner (2) (155 ) (148 ) Less: Distributions to participating
securities (2) (1 ) (2 ) Less: Undistributed loss allocated to
general partner (2) 3 1 Adjusted net
income attributable to common unitholders in accordance with
application of the two-class method for MLPs $ 179 $ 220
Basic weighted average common units outstanding 398
383 Basic adjusted net income per common unit $ 0.45
$ 0.58
Diluted Adjusted Net Income per Common
Unit Net income attributable to PAA $ 202 $ 283 Selected items
impacting comparability of net income attributable to PAA (1)
153 86 Adjusted net income attributable
to PAA 355 369 Less: Distributions to Series A preferred units (2)
(23 ) - Less: Distributions to general partner (2) (155 ) (148 )
Less: Distributions to participating securities (2) (1 ) (2 ) Less:
Undistributed loss allocated to general partner (2) 3
1 Adjusted net income attributable to common
unitholders in accordance with application of the two-class method
for MLPs $ 179 $ 220 Diluted weighted average
common units outstanding 399 385 Diluted adjusted net income
per common unit (3) $ 0.45 $ 0.57
(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 common unitholders 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, common unitholders and participating securities in
accordance with the contractual terms of
the partnership agreement and as further
prescribed under the two-class method.
(3)
The Series A preferred units were excluded
from the calculation of diluted net income per common unit as the
effect was antidilutive.
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
FINANCIAL DATA
RECONCILIATIONS
(in millions)
Three Months Ended March 31,
2016 2015 Net Income to Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") and
Excluding Selected Items Impacting Comparability ("Adjusted
EBITDA") Reconciliations Net Income $ 203 $ 284 Add: Interest
expense, net 112 105 Add: Income tax expense 19 16 Add:
Depreciation and amortization 114 104
EBITDA 448 509 Selected items impacting comparability of EBITDA (1)
173 113 Adjusted EBITDA $ 621 $
622 (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,
2016 2015 Adjusted EBITDA to Implied Distributable
Cash Flow ("DCF") Reconciliation Adjusted EBITDA $ 621 $ 622
Interest expense, net (1) (108 ) (101 ) Maintenance capital (47 )
(50 ) Current income tax expense (31 ) (42 ) Equity earnings in
unconsolidated entities, net of distributions 5 17 Distributions to
noncontrolling interests (2) (1 ) (1 ) Implied DCF $
439 $ 445 (1) Excludes certain non-cash items
impacting interest expense such as amortization of debt issuance
costs and terminated interest rate swaps. (2) Includes
distributions that pertain to the current period's net income,
which are paid in the subsequent period.
Three Months
Ended March 31, 2016 2015 Net Cash
Provided by Operating Activities Reconciliation EBITDA $ 448 $
509 Current income tax expense (31 ) (42 ) Interest expense, net
(1) (108 ) (101 ) Net change in assets and liabilities, net of
acquisitions 322 347 Other items to reconcile to net cash provided
by operating activities: Equity-indexed compensation expense
4 19 Net cash provided by operating activities
$ 635 $ 732 (1) Excludes certain non-cash
items impacting interest expense such as amortization of debt
issuance costs and terminated interest rate swaps.
PLAINS GP HOLDINGS AND SUBSIDIARIES FINANCIAL SUMMARY
(unaudited)
CONDENSED CONSOLIDATING STATEMENTS OF
OPERATIONS (1) (in millions, except per share
data)
Three Months Ended Three Months Ended
March 31, 2016 March 31, 2015 PAA
Consolidating
Adjustments (2)
PAGP PAA Consolidating
Adjustments (2)
PAGP REVENUES $ 4,111 $ - $ 4,111 $ 5,942 $ -
$ 5,942
COSTS AND EXPENSES Purchases and related
costs 3,348 - 3,348 5,042 - 5,042 Field operating costs 300 - 300
346 - 346 General and administrative expenses 67 1 68 78 1 79
Depreciation and amortization 114 -
114 104 1 105
Total costs and expenses 3,829 1 3,830 5,570 2 5,572
OPERATING INCOME 282 (1 ) 281 372 (2 ) 370
OTHER
INCOME/(EXPENSE) Equity earnings in unconsolidated entities 47
- 47 37 - 37 Interest expense, net (112 ) (4 ) (116 ) (105 ) (2 )
(107 ) Other income/(expense), net 5 -
5 (4 ) - (4 )
INCOME BEFORE TAX 222 (5 ) 217 300 (4 ) 296 Current income
tax expense (31 ) - (31 ) (42 ) - (42 ) Deferred income tax
(expense)/benefit 12 (21 ) (9 )
26 (18 ) 8
NET INCOME 203
(26 ) 177 284 (22 ) 262 Net income attributable to noncontrolling
interests (1 ) (140 ) (141 ) (1 )
(230 ) (231 )
NET INCOME ATTRIBUTABLE TO PAGP
$ 202 $ (166 ) $ 36 $ 283 $ (252 ) $ 31
BASIC AND DILUTED NET INCOME PER CLASS A SHARE
$ 0.14 $ 0.14
BASIC AND DILUTED WEIGHTED
AVERAGE CLASS A SHARES OUTSTANDING 253 212
(1)
The 2015 periods have been retroactively
adjusted to reflect the reclassification of the amortization of
debt issuance costs from "Depreciation and amortization" to
"Interest expense, net" as a result of our adoption of revised debt
issuance costs guidance issued by the FASB.
(2)
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, 2016
December 31, 2015 PAA Consolidating
Adjustments (1)
PAGP PAA Consolidating
Adjustments (2)
PAGP ASSETS Current assets $ 2,780 $ 4 $ 2,784 $
2,969 $ 3 $ 2,972 Property and equipment, net 13,670 19 13,689
13,474 19 13,493 Goodwill 2,405 - 2,405 2,405 - 2,405 Investments
in unconsolidated entities 2,097 - 2,097 2,027 - 2,027 Deferred tax
asset - 1,907 1,907 - 1,835 1,835 Linefill and base gas 899 - 899
898 - 898 Long-term inventory 112 - 112 129 - 129 Other long-term
assets, net 334 (2 ) 332 386 (3
) 383 Total assets $ 22,297 $ 1,928 $ 24,225 $ 22,288
$ 1,854 $ 24,142
LIABILITIES AND PARTNERS'
CAPITAL Current liabilities $ 3,063 $ 3 $ 3,066 $ 3,407 $ 2 $
3,409 Senior notes, net of unamortized discounts and debt issuance
costs 9,126 - 9,126 9,698 - 9,698 Other long-term debt, net of
unamortized debt issuance costs 27 591 618 677 557 1,234 Other
long-term liabilities and deferred credits 710 -
710 567 - 567 Total
liabilities 12,926 594 13,520 14,349 559 14,908 Partners'
capital excluding noncontrolling interests 9,313 (7,492 ) 1,821
7,881 (6,119 ) 1,762 Noncontrolling interests 58
8,826 8,884 58 7,414
7,472 Total partners' capital 9,371 1,334
10,705 7,939 1,295 9,234
Total liabilities and partners'
capital
$ 22,297 $ 1,928 $ 24,225 $ 22,288 $ 1,854 $ 24,142
(1)
Represents the aggregate consolidating
adjustments necessary to produce consolidated financial statements
for PAGP.
PLAINS GP HOLDINGS AND SUBSIDIARIES DISTRIBUTION
SUMMARY (unaudited)
Q1 2016 PAGP
DISTRIBUTION SUMMARY
(in millions, except per unit and per share data)
Q1
2016 (1) PAA Distribution/Common Unit $ 0.7000 GP
Distribution/Common Unit $ 0.3885 Total Distribution/Common
Unit $ 1.0885 PAA Common Units Outstanding at 4/29/16
398 Gross GP Distribution $ 160 Less: IDR Reduction
(5 ) Net Distribution from PAA to AAP (2) $ 155 Less: Debt Service
(3 ) Less: G&A Expense (1 ) Cash Available for
Distribution by AAP $ 150
Distributions to AAP
Partners Direct AAP Owners & AAP Management (59% economic
interest) $ 89 PAGP (41% economic interest) 61 Total
distributions to AAP Partners $ 150 Distribution to
PAGP Investors $ 62 PAGP Class A Shares Outstanding at
4/29/16 267 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 March 31, 2016 2015
Basic and Diluted Net Income per Class A Share (1)
Net income attributable to PAGP $ 36 $ 31 Basic and diluted
weighted average Class A shares outstanding 253 212 Basic
and diluted net income per Class A share $ 0.14 $ 0.14
(1)
Assumed exchanges of AAP units and AAP
Management Units were excluded from the calculation of diluted net
income per Class A share as the effect was not dilutive.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160504006747/en/
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)
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