This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Plains All American Pipeline, L.P. Reports Strong Second-Quarter 2012 Results

Plains All American Pipeline, L.P. (NYSE: PAA) today reported net income attributable to Plains of $378 million, or $1.85 per diluted limited partner unit, for the second quarter of 2012 as compared to $225 million, or $1.13 per diluted limited partner unit for the second quarter of 2011. The Partnership reported earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $557 million for the second quarter of 2012, compared to reported EBITDA of $367 million for the second quarter of 2011.

The Partnership’s reported results include the impact of items that affect comparability between reporting periods. The impact of these items is excluded from adjusted results, as detailed in the table below. Accordingly, the Partnership’s second-quarter 2012 adjusted net income attributable to Plains, adjusted net income per diluted limited partner unit and adjusted EBITDA were $343 million, $1.64 and $522 million, respectively. The comparable amounts for the second-quarter of 2011 were $224 million, $1.12 and $366 million. (See the section of this release entitled “Non-GAAP Financial Measures” and the attached tables for discussion of EBITDA and other non-GAAP financial measures and their reconciliation to the most directly comparable GAAP measures.)

“PAA delivered outstanding second-quarter results with all three segments delivering strong performance,” said Greg L. Armstrong, Chairman and CEO of Plains All American. “These results are reflective of PAA’s strategically located assets, proven business model and solid execution during favorable market conditions.”

Armstrong added, “Our distribution payable next week represents an 8.4% increase over last year’s August distribution and we remain on track to increase our distribution by 8-9% during 2012. Demand for our assets and services remains strong and we have good visibility for continued growth. We have completed over $3 billion of acquisitions since the beginning of 2011, and we are on track to execute over $1 billion of organic growth projects during 2012. Additionally , PAA ended the quarter with a strong balance sheet, $2.8 billion of committed liquidity and favorably positioned with respect to each of its targeted credit metrics.”

The following table summarizes selected items that the Partnership believes impact comparability of financial results between reporting periods (amounts in millions, except per unit amounts):

   
Three Months Ended Six Months Ended
June 30, June 30,
2012   2011 2012   2011
Selected Items Impacting Comparability - Income / (Loss) (1) :
Inventory valuation adjustments net of gains from related

derivative activities (2)

$ (5 ) $ - $ (5 ) $ -
Gains from other derivative activities (2) 77 21 18 41
Equity compensation expense (3) (12 ) (20 ) (38 ) (33 )
Net loss on early repayment of senior notes - - - (23 )
Net loss on foreign currency revaluation (16 ) - (16 ) -
Significant acquisition-related expenses (9 ) - (13 ) (4 )
Other (4)   -     -     -     1  
Selected items impacting comparability of net income attributable to Plains $ 35 $ 1 $ (54 ) $ (18 )
Less: GP 2% portion of selected items impacting comparability   (1 )   -     1     -  
Limited partners' 98% of selected items impacting comparability $ 34   $ 1   $ (53 ) $ (18 )
 
Impact to basic net income per limited partner unit $ 0.21   $ 0.02   $ (0.33 ) $ (0.12 )
Impact to diluted net income per limited partner unit $ 0.21   $ 0.01   $ (0.33 ) $ (0.12 )

(1)

 

Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

(2)

Gains from derivative activities related to revalued inventory are included in the line item "Inventory valuation adjustments net of gains from related derivative activities;" gains from derivative activities not related to revalued inventory are included in the line item "Gains from other derivative activities."

(3)

Equity compensation expense for the three and six months ended June 30, 2012 and 2011 excludes the portion of equity compensation expense represented by grants under our Long-term Incentive Plans ("LTIPs") that, pursuant to the terms of the grant, will be settled in cash only and have no impact on diluted units.

(4)

Includes other immaterial selected items impacting comparability, as well as the noncontrolling interests' portion of selected items.

 

The following tables present certain selected financial information by segment for the second quarter (amounts in millions):

             
Three Months Ended Three Months Ended
June 30, 2012 June 30, 2011
Supply and Supply and
Transportation Facilities Logistics Transportation Facilities Logistics
Revenues (1) $ 361 $ 287 $ 9,442 $ 290 $ 164 $ 8,586
Purchases and related costs (1) (35 ) (65 ) (9,030 ) (31 ) (20 ) (8,330 )
Field operating costs (excluding equity compensation expense) (1) (128 ) (86 ) (105 ) (106 ) (43 ) (73 )
Equity compensation expense - operations (3 ) - (1 ) (2 ) - (1 )

Segment G&A expenses (excluding equity compensation expense) (2)

(28 ) (18 ) (27 ) (16 ) (10 ) (23 )
Equity compensation expense - general and administrative (7 ) (4 ) (5 ) (11 ) (5 ) (8 )
Equity earnings in unconsolidated entities   9     -     -     4     -     -  
Reported segment profit $ 169   $ 114   $ 274   $ 128   $ 86   $ 151  

Selected items impacting comparability of segment profit (3)

  11     5     (53 )   9     5     (15 )
Segment profit excluding selected items impacting comparability $ 180   $ 119   $ 221   $ 137   $ 91   $ 136  
 
Maintenance capital $ 27   $ 10   $ 3   $ 17   $ 7   $ 3  
 
Six Months Ended Six Months Ended
June 30, 2012 June 30, 2011
Supply and Supply and
Transportation Facilities Logistics Transportation Facilities Logistics
Revenues (1) $ 678 $ 523 $ 18,319 $ 564 $ 325 $ 16,022
Purchases and related costs (1) (63 ) (139 ) (17,638 ) (54 ) (43 ) (15,535 )
Field operating costs (excluding equity compensation expense) (1) (224 ) (133 ) (207 ) (196 ) (83 ) (141 )
Equity compensation expense - operations (10 ) (1 ) (1 ) (5 ) (1 ) (1 )
Segment G&A expenses (excluding equity compensation expense) (2) (49 ) (32 ) (53 ) (32 ) (25 ) (47 )
Equity compensation expense - general and administrative (16 ) (14 ) (18 ) (17 ) (9 ) (13 )
Equity earnings in unconsolidated entities   16     -     -     5     -     -  
Reported segment profit $ 332   $ 204   $ 402   $ 265   $ 164   $ 285  

Selected items impacting comparability of segment profit (3)

  21     15     17     15     13     (32 )
Segment profit excluding selected items impacting comparability $ 353   $ 219   $ 419   $ 280   $ 177   $ 253  
 
Maintenance capital $ 52   $ 17   $ 7   $ 35   $ 10   $ 7  

(1)

 

Includes intersegment amounts.

(2)

Segment general and administrative expenses (G&A) reflect direct costs attributable to each segment and an allocation of other expenses to the segments based on the business activities that existed at that time. The proportional allocations by segment require judgment by management and will continue to be based on the business activities that exist during each period. Includes acquisition-related expenses for both the 2012 and 2011 periods.

(3)

Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.

 

Adjusted Transportation segment profit for the second quarter of 2012 increased by 31% over comparable 2011 results. This increase was primarily driven by acquisitions completed in late 2011 and early 2012 and higher average pipeline tariffs and volumes.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,559.12 -4.18 -0.03%
S&P 500 1,933.45 +2.78 0.14%
NASDAQ 4,381.48 +11.7070 0.27%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs