Plains All American Pipeline, L.P. Reports Strong Fourth-Quarter and Full-Year 2012 Results
Plains All American Pipeline, L.P. Reports Strong Fourth-Quarter and Full-Year 2012 Results
HOUSTON--(BUSINESS WIRE)-- Plains All American Pipeline, L.P. (NYSE: PAA) today reported net income attributable to Plains of $320 million, or $0.69 per diluted limited partner unit, for the fourth quarter of 2012, and net income attributable to Plains of $1.09 billion, or $2.40 per diluted limited partner unit, for the full year of 2012. Net income attributable to Plains for the fourth quarter of 2011 was $278 million, or $0.68 per diluted limited partner unit, and net income attributable to Plains for the full year of 2011 was $966 million, or $2.44 per diluted limited partner unit. The Partnership reported earnings before interest, taxes, depreciation and amortization ("EBITDA") of $541 million and $1.95 billion for the fourth quarter and full year of 2012, respectively. The comparable amounts for the fourth quarter and full year of 2011 were $426 million and $1.54 billion, respectively.
The Partnership's reported results include the impact of items that affect comparability between reporting periods. Items impacting comparability are excluded from adjusted results as detailed in the table below. Accordingly, the Partnership's fourth-quarter 2012 adjusted net income attributable to Plains, adjusted net income per diluted limited partner unit and adjusted EBITDA were $429 million, $1.01 and $609 million, respectively. The comparable amounts for the fourth quarter of 2011 were $322 million, $0.82 and $471 million, respectively.
The Partnership's adjusted net income attributable to Plains, adjusted net income per diluted limited partner unit and adjusted EBITDA for the full year of 2012 were $1.41 billion, $3.35 and $2.11 billion, respectively. The comparable amounts for the full year of 2011 were $1.02 billion, $2.62 and $1.60 billion, respectively. (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 generated exceptional results for the fourth quarter and full year of 2012," said Greg L. Armstrong, Chairman and CEO of Plains All American. "Our fee-based Transportation and Facilities segments delivered results in line with or ahead of guidance throughout the year as demand for our services remained strong and new capital projects were placed into service. Our Supply and Logistics segment substantially exceeded our guidance on the strength of increasing volumes, attractive margins, favorable market conditions and solid execution."
"During 2012, PAA invested $3.5 billion of total capital, including $1.2 billion in organic growth projects and $2.3 billion in strategic and complementary acquisitions. Importantly, as a result of PAA's disciplined and proactive financing efforts, the Partnership entered 2013 with a strong balance sheet, $2.4 billion of committed liquidity and very well positioned to execute its growth objectives while maintaining a solid credit profile."
"Expected contributions from investments made over the last few years combined with the $1.1 billion of planned organic growth capital for 2013 provide substantial visibility for continued baseline growth in 2013 and beyond. This visibility underpins our favorable outlook for continued attractive distribution growth. In that regard, concurrent with our distribution payable next week, we will have increased our distributions by 9.8% over the distribution paid in February 2012, and we are targeting 9 to 10% year-over-year distribution growth in 2013, while maintaining very attractive distribution coverage."
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 | Twelve Months Ended | ||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||
Selected Items Impacting Comparability - Income/(Loss)(1): | |||||||||||||||||||||||||||
Gains/(losses) from derivative activities net of inventory valuation adjustments (2) | $ | (56 | ) | $ | (11 | ) | $ | (74 | ) | $ | 61 | ||||||||||||||||
Asset impairments (3) | (41 | ) | - | (166 | ) | - | |||||||||||||||||||||
Equity compensation expense (4) | (10 | ) | (37 | ) | (59 | ) | (77 | ) | |||||||||||||||||||
Net loss on early repayment of senior notes | - | - | - | (23 | ) | ||||||||||||||||||||||
Net gain/(loss) on foreign currency revaluation | (1 | ) | 10 | (7 | ) | (7 | ) | ||||||||||||||||||||
Significant acquisition-related expenses | (1 | ) | (6 | ) | (14 | ) | (10 | ) | |||||||||||||||||||
Other (5) | - | - | - | 1 | |||||||||||||||||||||||
Selected items impacting comparability of net income attributable to Plains | $ | (109 | ) | $ | (44 | ) | $ | (320 | ) | $ | (55 | ) | |||||||||||||||
Impact to basic net income per limited partner unit | $ | (0.31 | ) | $ | (0.14 | ) | $ | (0.96 | ) | $ | (0.18 | ) | |||||||||||||||
Impact to diluted net income per limited partner unit | $ | (0.32 | ) | $ | (0.14 | ) | $ | (0.95 | ) | $ | (0.18 | ) | |||||||||||||||
(1) | Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability. | |||
(2) | Includes mark-to-market gains and losses resulting from derivative instruments that are related to underlying activities in future periods or the reversal of mark-to-market gains and losses from the prior period net of inventory valuation adjustments. | |||
(3) | Asset impairments are reflected in "Depreciation and amortization" on the Consolidated Statements of Operations. | |||
(4) | Equity compensation expense for the three and twelve months ended December 31, 2012 and 2011 excludes the portion of equity compensation expense represented by grants under 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. | |||
(5) | 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 fourth-quarter (amounts in millions):
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||||
Supply and | Supply and | ||||||||||||||||||||||||||||||||||||||
Transportation | Facilities | Logistics | Transportation | Facilities | Logistics | ||||||||||||||||||||||||||||||||||
Revenues (1) | $ | 373 | $ | 313 | $ | 9,072 | $ | 301 | $ | 280 | $ | 8,501 | |||||||||||||||||||||||||||
Purchases and related costs (1) | (34 | ) | (70 | ) | (8,724 | ) | (27 | ) | (118 | ) | (8,190 | ) | |||||||||||||||||||||||||||
Field operating costs (excluding equity compensation expense) (1) | (126 | ) | (85 | ) | (110 | ) | (93 | ) | (43 | ) | (89 | ) | |||||||||||||||||||||||||||
Equity compensation expense - operations | (3 | ) | - | - | (9 | ) | (1 | ) | (1 | ) | |||||||||||||||||||||||||||||
Segment G&A expenses (excluding equity compensation expense) (2) | (22 | ) | (16 | ) | (24 | ) | (20 | ) | (11 | ) | (20 | ) | |||||||||||||||||||||||||||
Equity compensation expense - general and administrative | (7 | ) | (4 | ) | (5 | ) | (17 | ) | (8 | ) | (18 | ) | |||||||||||||||||||||||||||
Equity earnings in unconsolidated entities | 12 | - | - | 4 | - | - | |||||||||||||||||||||||||||||||||
Reported segment profit | $ | 193 | $ | 138 | $ | 209 | $ | 139 | $ | 99 | $ | 183 | |||||||||||||||||||||||||||
Selected items impacting comparability of segment profit (3) | 5 | 3 | 58 | 21 | 8 | 17 | |||||||||||||||||||||||||||||||||
Segment profit excluding selected items impacting comparability | $ | 198 | $ | 141 | $ | 267 | $ | 160 | $ | 107 | $ | 200 | |||||||||||||||||||||||||||
Maintenance capital | $ | 30 | $ | 16 | $ | 2 | $ | 34 | $ | 6 | $ | 3 | |||||||||||||||||||||||||||
Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||||||
Supply and | Supply and | ||||||||||||||||||||||||||||||||||||||
Transportation | Facilities | Logistics | Transportation | Facilities | Logistics | ||||||||||||||||||||||||||||||||||
Revenues (1) | $ | 1,416 | $ | 1,098 | $ | 36,440 | $ | 1,165 | $ | 796 | $ | 33,068 | |||||||||||||||||||||||||||
Purchases and related costs (1) | (134 | ) | (238 | ) | (35,139 | ) | (115 | ) | (205 | ) | (31,984 | ) | |||||||||||||||||||||||||||
Field operating costs (excluding equity compensation expense) (1) | (468 | ) | (289 | ) | (417 | ) | (387 | ) | (165 | ) | (314 | ) | |||||||||||||||||||||||||||
Equity compensation expense - operations | (16 | ) | (2 | ) | (2 | ) | (14 | ) | (2 | ) | (2 | ) | |||||||||||||||||||||||||||
Segment G&A expenses (excluding equity compensation expense) (2) | (96 | ) | (64 | ) | (101 | ) | (69 | ) | (47 | ) | (86 | ) | |||||||||||||||||||||||||||
Equity compensation expense - general and administrative | (30 | ) | (23 | ) | (28 | ) | (38 | ) | (19 | ) | (35 | ) | |||||||||||||||||||||||||||
Equity earnings in unconsolidated entities | 38 | - | - | 13 | - | - | |||||||||||||||||||||||||||||||||
Reported segment profit | $ | 710 | $ | 482 | $ | 753 | $ | 555 | $ | 358 | $ | 647 | |||||||||||||||||||||||||||
Selected items impacting comparability of segment profit (3) | 32 | ||||||||||||||||||||||||||||||||||||||
