Sign Up for FREE Daily Energy News
CDN NEWS  |   US NEWS  | TIMELY. FOCUSED. REVELANT. FREE
BREAKING NEWS:

Hazloc Heaters
Shocker PASS - Headwind Solutions
Sur-Flo Meters
Shocker PASS - Headwind Solutions
Sur-Flo Meters
Hazloc Heaters

Plains All American Pipeline, L.P. and Plains GP Holdings Report First-Quarter 2019 Results


HOUSTON–(BUSINESS WIRE)–Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP Holdings (NYSE: PAGP) today reported first-quarter 2019 results.

First-Quarter Highlights

  • Delivered 1Q19 financial and operating results ahead of expectations
  • Completed August 2017 deleveraging plan; updated financial policy and targeted metrics; increased annual distribution
  • Increased 2019 Adjusted EBITDA guidance
  • Executing Permian-focused capital program, sanctioning new growth projects, and advancing new commercial opportunities

“Our first-quarter results and increased 2019 guidance reflect continued solid execution of our business plan,” stated Willie Chiang, Chief Executive Officer of Plains All American Pipeline. “We have meaningfully improved our financial positioning, and we remain focused on executing 2019 goals and advancing a number of initiatives that position us for continued fee-based growth with attractive returns in 2020 and beyond.”

Plains All American Pipeline, L.P.

Summary Financial Information (unaudited)

(in millions, except per unit data)

Three Months Ended
March 31,
%
GAAP Results 2019 2018 Change
Net income $ 970 $ 288 237 %
Diluted net income per common unit $ 1.20 $ 0.33 264 %
Diluted weighted average common units outstanding (1) 800 727 10 %
Distribution per common unit declared for the period $ 0.36 $ 0.30 20 %

____________________

(1) For the three months ended March 31, 2019, includes all potentially dilutive securities outstanding (our Series A preferred units and equity-indexed compensation awards) during the period. See the “Computation of Basic and Diluted Net Income Per Common Unit” table attached hereto for additional information.
Three Months Ended
March 31,
%
Non-GAAP Results (1) 2019 2018 Change
Adjusted net income (2) $ 565 $ 310 82 %
Diluted adjusted net income per common unit (2) $ 0.69 $ 0.36 92 %
Adjusted EBITDA $ 862 $ 593 45 %
Implied DCF per common unit $ 0.90 $ 0.61 48 %

____________________

(1) 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 Implied DCF) and their reconciliation to the most directly comparable measures as reported in accordance with GAAP.
(2) During the fourth quarter of 2018, we began classifying net gains and losses on asset sales and asset impairments as a selected item impacting comparability in the calculation of adjusted net income. Prior period amounts have been recast to reflect this change. See the “Selected Items Impacting Comparability” table attached hereto for additional information.

Segment Adjusted EBITDA for the first quarter of 2019 and 2018 is presented below:

Summary of Selected Financial Data by Segment (unaudited)

(in millions)

Segment Adjusted EBITDA
Transportation Facilities

Supply and
Logistics

Three Months Ended March 31, 2019 $ 399 $ 184 $ 278
Three Months Ended March 31, 2018 $ 335 $ 185 $ 72
Percentage change in Segment Adjusted EBITDA versus 2018 period 19 % (1 )% 286 %
Percentage change in Segment Adjusted EBITDA versus 2018 period further adjusted for impact of divested assets 26 % 1 % N/A

First-quarter 2019 Transportation Segment Adjusted EBITDA increased by 19% over comparable 2018 results. This increase was primarily driven by increased volume on our Permian Basin systems, including the start-up of our Sunrise II pipeline in the fourth quarter of 2018. First-quarter 2019 results also benefited from increased volumes on certain of our pipelines in the Central region and increased volumes into our Eagle Ford JV system, which receives volumes from our Cactus pipeline. These favorable results were partially offset by our sale of an interest in the BridgeTex pipeline and asset sales in the Rocky Mountain region.

First-quarter 2019 Facilities Segment Adjusted EBITDA was in line with comparable 2018 results.

First-quarter 2019 Supply and Logistics Segment Adjusted EBITDA increased versus comparable 2018 results due to favorable crude oil differentials and improved NGL margins.

2019 Full-Year Guidance

The table below presents our full-year 2019 financial and operating guidance:

Financial and Operating Guidance (unaudited)

(in millions, except volumes, per unit and per barrel data)

Twelve Months Ended December 31,
2017 2018 2019 (G)
+ / –
Segment Adjusted EBITDA
Transportation $ 1,287 $ 1,508 $ 1,735
Facilities 734 711 665
Fee-Based $ 2,021 $ 2,219 $ 2,400
Supply and Logistics 60 462 450
Adjusted other income/(expense), net 1 3
Adjusted EBITDA (1) $ 2,082 $ 2,684 $ 2,850
Interest expense, net (2) (483 ) (419 ) (400 )
Maintenance capital (247 ) (252 ) (230 )
Current income tax expense (28 ) (66 ) (45 )
Other (12 ) 1 (5 )
Implied DCF (1) $ 1,312 $ 1,948 $ 2,170
Preferred unit distributions paid (3) (5 ) (161 ) (200 )
Implied DCF Available to Common Unitholders $ 1,307 $ 1,787 $ 1,970
Implied DCF per Common Unit (1) $ 1.82 $ 2.46 $ 2.71
Implied DCF per Common Unit and Common Equivalent Unit (1) $ 1.67 $ 2.38 $ 2.66
Distributions per Common Unit (4) $ 1.95 $ 1.20 $ 1.38
Common Unit Distribution Coverage Ratio 0.94x 2.05x 1.96x
Diluted Adjusted Net Income per Common Unit (1) $ 1.10 $ 1.88 $ 2.10
Operating Data
Transportation
Average daily volumes (MBbls/d) 5,186 5,889 7,000
Segment Adjusted EBITDA per barrel $ 0.68 $ 0.70 $ 0.68
Facilities
Average capacity (MMBbls/Mo) 130 124 125
Segment Adjusted EBITDA per barrel $ 0.47 $ 0.48 $ 0.44
Supply and Logistics
Average daily volumes (MBbls/d) 1,219 1,309 1,300
Segment Adjusted EBITDA per barrel $ 0.13 $ 0.97 $ 0.95
Expansion Capital $ 1,135 $ 1,888 $ 1,350
Second-Quarter Adjusted EBITDA as Percentage of Full Year 22% 19% 21%

____________________

(G)

2019 Guidance forecasts are intended to be + / – amounts.

(1) See the section of this release entitled “Non-GAAP Financial Measures and Selected Items Impacting Comparability” and the Non-GAAP Reconciliation tables attached hereto for information regarding non-GAAP financial measures and, for the historical 2017 and 2018 periods, their reconciliation to the most directly comparable measures as reported in accordance with GAAP. We do not provide a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures on a forward-looking basis as it is impractical to forecast certain items that we have defined as “Selected Items Impacting Comparability” without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of and the periods in which such items may be recognized. Thus, a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures could result in disclosure that could be imprecise or potentially misleading.
(2) Excludes certain non-cash items impacting interest expense such as amortization of debt issuance costs and terminated interest rate swaps.
(3) Cash distributions paid to our preferred unitholders during the year presented. The distribution requirement of our Series A preferred units was paid-in-kind for all 2017 quarterly distributions and for the February 2018 quarterly distribution. Distributions on our Series A preferred units were paid in cash beginning with the May 2018 quarterly distribution. The distribution requirement of our Series B preferred units is payable semi-annually in arrears on May 15 and November 15. A pro-rated initial distribution on the Series B preferred units was paid on November 15, 2017.
(4) Cash distributions per common unit paid during 2017 and 2018. 2019 (G) reflects the cash distribution per common unit paid in February and the increased annualized distribution rate of $1.44 per common unit for the remainder of the year.

Plains GP Holdings

PAGP owns an indirect non-economic controlling interest in PAA’s general partner and an indirect limited partner interest in PAA. 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 2019 Q4 2018 Q1 2018
Distribution per Class A share declared for the period $ 0.36 $ 0.30 $ 0.30
Q1 2019 distribution percentage change from prior periods 20 % 20 %

Conference Call

PAA and PAGP will hold a joint conference call at 4:00 p.m. CT on Tuesday, May 7, 2019 to discuss the following items:

  1. PAA’s first-quarter 2019 performance;
  2. Financial and operating guidance for the full year of 2019;
  3. Capitalization and liquidity; and
  4. PAA and PAGP’s outlook for the future.

Conference Call Webcast Instructions

To access the internet webcast please go to https://event.webcasts.com/starthere.jsp?ei=1237216&tp_key=17fd1f999f

Alternatively, the webcast can be accessed at 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. A transcript will also be available after the call at the above referenced website.

Non-GAAP Financial Measures and Selected Items Impacting Comparability

To supplement our financial information presented in accordance with GAAP, management uses additional measures known as “non-GAAP financial measures” in its evaluation of past performance and prospects for the future. The primary additional measures used by management are earnings before interest, taxes, depreciation and amortization (including our proportionate share of depreciation and amortization and gains and losses on significant asset sales of unconsolidated entities), gains and losses on asset sales and asset impairments and gains on investments in unconsolidated entities, adjusted for certain selected items impacting comparability (“Adjusted EBITDA”) and implied distributable cash flow (“DCF”).

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 to supplement related GAAP financial measures, (i) provide additional information about our core operating performance and ability to fund distributions to our unitholders through cash generated by our operations and (ii) provide investors with the same financial analytical framework upon which management bases financial, operational, compensation and planning/budgeting decisions. We also present these and additional non-GAAP financial measures, including adjusted net income attributable to PAA and basic and diluted adjusted net income per common unit, as they are measures that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations. These non-GAAP measures may exclude, for example, (i) charges for obligations that are expected to be settled with the issuance of equity instruments, (ii) gains or losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), the mark-to-market related to our Preferred Distribution Rate Reset Option, 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 “Other current liabilities” on our Condensed Consolidated Financial Statements. Such amounts are presented net of applicable amounts subsequently recognized into revenue. Furthermore, the calculation of these measures contemplates tax effects as a separate reconciling item, where applicable. 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 do not necessarily consider all of our selected items impacting comparability to be non-recurring, infrequent or unusual, but we believe that an understanding of these selected items impacting comparability is material to the evaluation of our operating results and prospects.

Although we present selected items impacting comparability that management considers 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, divestitures, expansion projects and numerous other factors. These types of variations may not be 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.

Our definition and calculation of certain non-GAAP financial measures may not be comparable to similarly-titled measures of other companies. Adjusted EBITDA, Implied DCF and other non-GAAP financial performance measures are reconciled to Net Income (the most directly comparable measure as reported in accordance with GAAP) for the historical 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, we encourage you to visit our website at www.plainsallamerican.com (in particular the section under “Financial Information” entitled “Non-GAAP Reconciliations” within the Investor Relations tab), which presents a reconciliation of our commonly used non-GAAP and supplemental financial measures.

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 actual or expected volume of crude oil 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, reduced demand, 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, including the effects of capacity overbuild in areas where we operate; market distortions caused by over-commitments to infrastructure projects, which impacts volumes, margins, returns and overall earnings; unanticipated changes in crude oil and NGL 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, NGL and natural gas and resulting changes in pricing conditions or transportation throughput requirements; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; the occurrence of a natural disaster, catastrophe, terrorist attack (including eco-terrorist attacks) or other event, including cyber or other attacks on our electronic and computer systems; failure to implement or capitalize, or delays in implementing or capitalizing, on expansion projects, whether due to permitting delays, permitting withdrawals or other factors; 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; 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 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 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 effectiveness of our risk management activities; 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; 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, 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, NGLs and natural gas. 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 more than 6 million barrels per day of crude oil and NGL in its Transportation segment. PAA is headquartered in Houston, Texas. More information is available at www.plainsallamerican.com.

Plains GP Holdings is a publicly traded entity that owns an indirect, non-economic controlling general partner interest in PAA and an indirect limited partner interest in PAA, one of the largest energy infrastructure and logistics companies in North America. PAGP is headquartered in Houston, Texas. More information is available at www.plainsallamerican.com.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per unit data)

Three Months Ended
March 31,
2019 2018
REVENUES $ 8,375 $ 8,398
COSTS AND EXPENSES
Purchases and related costs 7,119 7,519
Field operating costs 326 292
General and administrative expenses 76 79
Depreciation and amortization (1) 136 127
(Gains)/losses on asset sales and asset impairments, net (1) 4
Total costs and expenses 7,661 8,017
OPERATING INCOME 714 381
OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities 89 75
Gain on investment in unconsolidated entities 267
Interest expense, net (101 ) (106 )
Other income/(expense), net 25 (1 )
INCOME BEFORE TAX 994 349
Current income tax expense (30 ) (13 )
Deferred income tax benefit/(expense) 6 (48 )
NET INCOME $ 970 $ 288
NET INCOME PER COMMON UNIT:
Net income allocated to common unitholders — Basic $ 917 $ 237
Basic weighted average common units outstanding 727 725
Basic net income per common unit $ 1.26 $ 0.33
Net income allocated to common unitholders — Diluted $ 957 $ 237
Diluted weighted average common units outstanding 800 727
Diluted net income per common unit $ 1.20 $ 0.33

____________________

(1) Effective for the fourth quarter of 2018, we reclassified amounts related to gains and losses on asset sales and asset impairments from “Depreciation and amortization” to “(Gains)/losses on asset sales and asset impairments, net” on our Condensed Consolidated Statements of Operations.

NON-GAAP ADJUSTED RESULTS

(in millions, except per unit data)

Three Months Ended
March 31,
2019 2018
Adjusted net income $ 565 $ 310
Diluted adjusted net income per common unit $ 0.69 $ 0.36
Adjusted EBITDA $ 862 $ 593

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(in millions)

March 31,
2019
December 31,
2018
ASSETS
Current assets $ 4,247 $ 3,533
Property and equipment, net 14,889 14,787
Goodwill 2,529 2,521
Investments in unconsolidated entities 3,263 2,702
Linefill and base gas 907 916
Long-term operating lease right-of-use assets, net 477
Long-term inventory 181 136
Other long-term assets, net 893 916
Total assets $ 27,386 $ 25,511
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities $ 4,182 $ 3,456
Senior notes, net 8,943 8,941
Other long-term debt, net 234 202
Long-term operating lease liabilities 383
Other long-term liabilities and deferred credits 882 910
Total liabilities 14,624 13,509
Partners’ capital 12,762 12,002
Total liabilities and partners’ capital $ 27,386 $ 25,511

DEBT CAPITALIZATION RATIOS

(in millions)

March 31,
2019
December 31,
2018
Short-term debt $ 149 $ 66
Long-term debt 9,177 9,143
Total debt $ 9,326 $ 9,209
Long-term debt $ 9,177 $ 9,143
Partners’ capital 12,762 12,002
Total book capitalization $ 21,939 $ 21,145
Total book capitalization, including short-term debt $ 22,088 $ 21,211
Long-term debt-to-total book capitalization 42 % 43 %
Total debt-to-total book capitalization, including short-term debt 42 % 43 %

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

COMPUTATION OF BASIC AND DILUTED NET INCOME PER COMMON UNIT (1)

(in millions, except per unit data)

Three Months Ended
March 31,
2019 2018
Basic Net Income per Common Unit
Net income $ 970 $ 288
Distributions to Series A preferred unitholders (37 ) (37 )
Distributions to Series B preferred unitholders (12 ) (12 )
Other (4 ) (2 )
Net income allocated to common unitholders $ 917 $ 237
Basic weighted average common units outstanding 727 725
Basic net income per common unit $ 1.26 $ 0.33
Diluted Net Income per Common Unit
Net income $ 970 $ 288
Distributions to Series A preferred unitholders (37 )
Distributions to Series B preferred unitholders (12 ) (12 )
Other (1 ) (2 )
Net income allocated to common unitholders $ 957 $ 237
Basic weighted average common units outstanding 727 725
Effect of dilutive securities:
Series A preferred units (2) 71
Equity-indexed compensation plan awards (3) 2 2
Diluted weighted average common units outstanding 800 727
Diluted net income per common unit $ 1.20 $ 0.33

Contacts

Plains All American Pipeline, L.P. and Plains GP Holdings
Roy Lamoreaux
Vice President, Investor Relations & Communications
(866) 809-1291

Brett Magill
Director, Investor Relations
(866) 809-1291

Read full story here



Share This:



More News Articles


New SHOWCASE Directory Companies

 

Gardner Denver
T.A. Cook
STEP Energy Services
Presto GeoSystems