Exhibit 99.1
| | | | |
Contacts: | | Phil D. Kramer Executive Vice President and CFO 713/646-4560 — 800/564-3036 | | Roy I. Lamoreaux Manager, Investor Relations 713/646-4222 — 800/564-3036 |
FOR IMMEDIATE RELEASE
Plains All American Pipeline, L.P.
Reports Strong First Quarter 2007 Results —
Reported Net Income Increases 34%; EBITDA Increases 65%
(Houston — May 2, 2007) Plains All American Pipeline, L.P. (NYSE: PAA) today reported net income for the first quarter of 2007 of $84.7 million, or $0.61 per diluted limited partner unit compared to net income for the first quarter of 2006 of $63.4 million, or $0.71 per diluted limited partner unit ($57.1 million, or $0.63 per diluted limited partner unit for the period ended March 31, 2006 before cumulative effect of change in accounting principle). Comparisons with the prior year period are impacted by selected items impacting comparability in each period. (See table entitled “Selected items impacting comparability” on page 2.) In addition, the Partnership’s basic weighted average units outstanding for the first quarter 2007 totaled 109.4 million (110.7 million diluted) as compared to 74.0 million (75.7 million diluted) in last year’s first quarter.
The Partnership reported earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarter of 2007 of $165.8 million, an increase of approximately 65% compared with EBITDA of $100.3 million for the first quarter 2006. (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 reconciliations of such measures to the comparable GAAP measures.)
Greg L. Armstrong, Chairman and CEO of Plains All American commented, “Our operating and financial results for the first quarter of 2007 reflect solid contributions from our acquisition of Pacific Energy as well as from other recent expansion and acquisition investments which contributed meaningful fee-based revenue. Energy markets were extremely volatile over the past several months and we believe that this quarter’s performance validates the strength of our business model. Adjusted results not only exceeded the Partnership’s adjusted results for the comparable quarter of 2006, but also surpassed the upper end of our guidance range for the first quarter of 2007. In addition, we have timely achieved the four major milestones associated with the Pacific Energy acquisition, and we believe we are on track to achieve each of the annual performance goals established for 2007.”
Armstrong continued, “Looking forward, we intend to complete our $500 million internal growth capital program over the balance of the year and we are confident that this capital program will be a major driver of future distribution growth.”
Reported results include the impact of various items that affect comparability between reporting periods. Adjusted results exclude selected items impacting comparability, as further described in the table below. Accordingly, the Partnership’s first quarter 2007 adjusted net income, adjusted net income per diluted limited partner unit and adjusted EBITDA were $119.6 million, $0.92 and $200.7 million, respectively, representing increases of approximately 73%, 12% and 89% over corresponding metrics for the first quarter of 2006.
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The following table summarizes selected items that the Partnership believes impact comparability of financial results between reporting periods:
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
| | (In millions, except per unit data) | |
|
Selected items impacting comparability | | | | | | | | |
Long-Term Incentive Plan (“LTIP”) charge(1) | | $ | (17.9 | ) | | $ | (10.6 | ) |
Cumulative effect of change in accounting principle — LTIP(2) | | | — | | | | 6.3 | |
Loss on foreign currency revaluation | | | — | | | | (0.9 | ) |
SFAS 133mark-to-market adjustment | | | (17.0 | ) | | | (0.7 | ) |
| | | | | | | | |
Selected items impacting comparability | | | (34.9 | ) | | | (5.9 | ) |
Less: GP 2% portion of selected items impacting comparability | | | 0.7 | | | | 0.1 | |
| | | | | | | | |
LP 98% portion of selected items impacting comparability | | $ | (34.2 | ) | | $ | (5.8 | ) |
| | | | | | | | |
Impact to basic net income per limited partner unit(3) | | $ | (0.31 | ) | | $ | (0.11 | ) |
| | | | | | | | |
Impact to diluted net income per limited partner unit(3) | | $ | (0.31 | ) | | $ | (0.11 | ) |
| | | | | | | | |
| | |
(1) | | The LTIP charge for the three month period ended March 31, 2007 excludes the portion of the LTIP expense represented by LTIP grants under the 2006 Plan that, pursuant to the terms of the Plan, will be settled in cash only and has no impact on diluted units. |
|
(2) | | During the first quarter of 2006, we adopted SFAS No. 123(R) “Share Based Payment,” which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements at fair value. The cumulative effect adjustment represented a decrease to our LTIPlife-to-date accrued expense and related liability, and therefore resulted in a non-cash gain of $6.3 million in the first quarter of 2006. |
|
(3) | | In periods when the Partnership’s net income exceeds the cash distribution paid during such periods, the application ofEmerging Issues Task Force IssueNo. 03-06: “Participating Securities and the Two Class Method under FASB Statement No. 128” (“EITF03-06”)does not impact the partnership’s aggregate net income or EBITDA, but does reduce the Partnership’s net income per limited partner unit. The application of EITF03-06 negatively impacted basic and diluted earnings per limited partner unit by $0.04 for the three months ended March 31, 2006; however, there was no impact of EITF03-06 for the three months ended March 31, 2007. |
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The following tables present certain selected financial information by segment for the first quarter reporting periods:
| | | | | | | | | | | | |
| | Three Months Ended
| |
| | March 31, 2007 | |
| | Transportation
| | | Facilities
| | | Marketing
| |
| | Operations | | | Operations | | | Operations(4) | |
| | (In millions) | |
|
Revenues(1) | | $ | 178.2 | | | $ | 45.1 | | | $ | 4,109.6 | |
Purchases and related costs(1) | | | (17.5 | ) | | | — | | | | (3,985.5 | ) |
Field operating costs (excluding LTIP charge) | | | (66.4 | ) | | | (18.9 | ) | | | (38.2 | ) |
LTIP charge — operations | | | (2.1 | ) | | | — | | | | (0.1 | ) |
Segment G&A expenses (excluding LTIP charge)(2) | | | (12.6 | ) | | | (4.9 | ) | | | (12.9 | ) |
LTIP charge — general and administrative | | | (7.4 | ) | | | (2.1 | ) | | | (6.9 | ) |
Equity earnings in unconsolidated entities | | | 0.9 | | | | 2.7 | | | | — | |
| | | | | | | | | | | | |
Segment profit | | $ | 73.1 | | | $ | 21.9 | | | $ | 66.0 | |
| | | | | | | | | | | | |
SFAS 133mark-to-market impact(3) | | $ | — | | | $ | — | | | $ | (17.0 | ) |
| | | | | | | | | | | | |
Maintenance capital | | $ | 3.2 | | | $ | 3.8 | | | $ | 3.7 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended
| |
| | March 31, 2006 | |
| | Transportation
| | | Facilities
| | | Marketing
| |
| | Operations | | | Operations | | | Operations(4) | |
| | (In millions) | |
|
Revenues(1) | | $ | 117.9 | | | $ | 11.9 | | | $ | 8,560.3 | |
Purchases and related costs(1) | | | (18.2 | ) | | | — | | | | (8,461.3 | ) |
Field operating costs (excluding LTIP charge) | | | (46.9 | ) | | | (5.5 | ) | | | (31.6 | ) |
LTIP charge — operations | | | (1.1 | ) | | | — | | | | (0.1 | ) |
Segment G&A expenses (excluding LTIP charge)(2) | | | (9.9 | ) | | | (2.5 | ) | | | (10.0 | ) |
LTIP charge — general and administrative | | | (4.0 | ) | | | (1.2 | ) | | | (4.2 | ) |
Equity earnings in unconsolidated entities | | | 0.3 | | | | (0.2 | ) | | | — | |
| | | | | | | | | | | | |
Segment profit | | $ | 38.1 | | | $ | 2.5 | | | $ | 53.1 | |
| | | | | | | | | | | | |
SFAS 133mark-to-market impact(3) | | $ | — | | | $ | — | | | $ | (0.7 | ) |
| | | | | | | | | | | | |
Maintenance capital | | $ | 3.0 | | | $ | 0.8 | | | $ | 0.9 | |
| | | | | | | | | | | | |
| | |
(1) | | Includes intersegment amounts. We adopted EITF04-13 effective April 1, 2006 which impacts the comparability of our revenues and purchases. Revenues and purchases for the three months ended March 31, 2006 include buy/sell transactions of $4,761.9 million. Revenues and purchases from such transactions are excluded from the three month period ended March 31, 2007. |
|
(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. |
|
(3) | | Amounts related to SFAS 133 are included in revenues and impact segment profit. The SFAS 133mark-to-market adjustment is primarily based upon crude oil prices at the end of the period and is related to the non-effective portion of our cash flow hedges, as well as certain derivative contracts that do not qualify under SFAS 133 as cash flow hedges. The net gain or loss related to these derivative instruments is principally offset by physical positions in future periods. |
|
(4) | | Gains/losses on foreign currency revaluation are included in the Marketing segment. |
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Excluding selected items impacting comparability, segment profit from Transportation operations in the first quarter of 2007 was $82.3 million, approximately 91% higher than first quarter 2006 segment results of $43.2 million. These 2007 results incorporate contributions from the November 15, 2006 acquisition of Pacific Energy as well as other 2006 acquisition and expansion activities. Pipeline volumes for the first quarter of 2007 were approximately 2.6 million barrels per day versus approximately 1.8 million barrels per day in the first quarter 2006.
First quarter 2007 Facilities operations adjusted segment profit of $23.9 million represents an approximate increase of 550% over Facilities operations adjusted segment profit of $3.7 million for 2006. Operating activities in this segment also benefited from solid contributions from the Pacific Energy acquisition and additional acquisitions and expansion activities completed in 2006.
Marketing operations adjusted segment profit of $89.7 million for the first quarter 2007 represents an increase of 52% over the corresponding 2006 results, reflecting increased volumes, an expanded asset base, and favorable market conditions.
The Partnership’s basic weighted average units outstanding for the first quarter 2007 totaled 109.4 million (110.7 million diluted) as compared to 74.0 million (75.7 million diluted) in last year’s first quarter. At March 31, 2007, the Partnership had approximately 109.4 million units outstanding, long-term debt of approximately $2.6 billion and a long-termdebt-to-total capitalization ratio of approximately 47%.
On April 17, 2007, the Partnership declared a cash distribution of $0.8125 per unit ($3.25 per unit on an annualized basis) on its outstanding limited partner units. The distribution will be payable on May 15, 2007, and represents an increase of approximately 14.8% over the distribution paid in May 2006 and approximately 1.6% over the distribution paid in February 2007. This represents the 12th consecutive increase in quarterly distributions for the Partnership and the 19th increase in the last twenty-five quarters.
The Partnership will furnish a current report onForm 8-K, which will include material in this press release and financial and operational guidance for the second quarter and full year 2007. A copy of theForm 8-K will be available on the Partnership’s website at www.paalp.com.
Non-GAAP Financial Measures
In this release, the Partnership’s EBITDA disclosure is not presented in accordance with generally accepted accounting principles and is not intended to be used in lieu of GAAP presentations of net income or cash flows from operating activities. EBITDA is presented because we believe it provides additional information with respect to both the performance of our fundamental business activities as well as our ability to meet our future debt service, capital expenditures and working capital requirements. We also believe that debt holders commonly use EBITDA to analyze Partnership performance. In addition, we present selected items that impact the comparability of our operating results as additional information that may be helpful to your understanding of our financial results. We consider an understanding of these selected items impacting comparability to be material to our 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 in management’s discussion and analysis of operating results in our Quarterly Report onForm 10-Q.
A reconciliation of EBITDA to net income and cash flows from operating activities for the periods presented is included in the tables attached to this release. In addition, the Partnership maintains on its website (www.paalp.com) a reconciliation of all non-GAAP financial information, such as EBITDA, that it reconciles to the most comparable GAAP measures. To access the information, investors should click on the “Investor Relations” link on the Partnership’s home page and then the “Non-GAAP Reconciliation” link on the Investor Relations page.
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Conference Call
The Partnership will host a conference call on Thursday, May 3, 2007 to discuss the following items:
1. The Partnership’s first quarter 2007 performance;
2. The status of the Pacific integration, major expansion projects and recent acquisition activity;
3. Capitalization and liquidity;
4. Financial and operating guidance for the second quarter and full year 2007; and
5. The Partnership’s outlook for the future.
The call will begin at 10:00 AM (Central). To participate in the call, please dial877-709-8150, or, for international callers,201-689-8354, at approximately 9:55 AM (Central). No password or reservation number is required.
Webcast Instructions
To access the Internet webcast, please go to the Partnership’s website atwww.paalp.com, choose “Investor Relations,” and then choose “Conference Calls.” Following the live webcast, the call will be archived for a period of sixty (60) days on the Partnership’s website.
Telephonic Replay Instructions
To listen to a telephonic replay of the conference call, please dial877-660-6853, or, for international callers,201-612-7415, and enter account number 232 and replay number 238865. The replay will be available beginning Thursday, May 3, 2007, at approximately 1:00 PM (Eastern) and continue until 11:59 PM (Eastern) Thursday, May 10, 2007.
Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the partnership also develops and operates natural gas storage facilities. The Partnership is headquartered in Houston, Texas, and its common units are traded on the New York Stock Exchange under the symbol “PAA.”
Forward Looking Statements
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from results anticipated in the forward-looking statements. These risks and uncertainties include, among other things: the failure to realize the anticipated synergies and other benefits of the merger with Pacific Energy; the success of our risk management activities; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; abrupt or severe declines or interruptions in outer continental shelf production located offshore California and transported on our pipeline system; failure to implement or capitalize on planned internal growth projects; shortages or cost increases of power supplies, materials or labor; the availability of adequate third party production volumes for transportation and marketing in the areas in which we operate, and other factors that could cause declines in volumes shipped on our pipelines by us and third party shippers; fluctuations in refinery capacity in areas supplied by our main lines, and other factors affecting demand for various grades of crude oil, refined products and natural gas and resulting changes in pricing conditions or transmission throughput requirements; the availability of, and our ability to consummate, acquisition or combination opportunities; our access to capital to fund additional acquisitions and our ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets or businesses and the risks associated with
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operating in lines of business that are distinct and separate from our historical operations; unanticipated changes in crude oil market structure and volatility (or lack thereof); the impact of current and future laws, rulings and governmental regulations; the effects of competition; continued creditworthiness of, and performance by, our counterparties; interruptions in service and fluctuations in tariffs or volumes on third party pipelines; increased costs or lack of availability of insurance; fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our Long-Term Incentive Plans; the currency exchange rate of the Canadian dollar; weather interference with business operations or project construction; risks related to the development and operation of natural gas storage facilities; general economic, market or business conditions; and other factors and uncertainties inherent in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products discussed in the Partnership’s filings with the Securities and Exchange Commission.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
REVENUES(1) | | $ | 4,229.5 | | | $ | 8,635.1 | |
COSTS AND EXPENSES | | | | | | | | |
Purchases and related costs(1) | | | 3,899.6 | | | | 8,424.5 | |
Field operating costs | | | 125.7 | | | | 85.2 | |
General and administrative expenses | | | 46.8 | | | | 31.8 | |
Depreciation and amortization | | | 39.9 | | | | 21.6 | |
| | | | | | | | |
Total costs and expenses | | | 4,112.0 | | | | 8,563.1 | |
| | | | | | | | |
OPERATING INCOME | | | 117.5 | | | | 72.0 | |
OTHER INCOME/(EXPENSE) | | | | | | | | |
Equity earnings in unconsolidated entities | | | 3.6 | | | | 0.1 | |
Interest expense | | | (41.1 | ) | | | (15.3 | ) |
Interest income and other income (expense), net | | | 4.8 | | | | 0.3 | |
Income tax expense | | | (0.1 | ) | | | — | |
| | | | | | | | |
Income before cumulative effect of change in accounting principle | | | 84.7 | | | | 57.1 | |
| | | | | | | | |
Cumulative effect of change in accounting principle | | | — | | | | 6.3 | |
| | | | | | | | |
NET INCOME | | $ | 84.7 | | | $ | 63.4 | |
| | | | | | | | |
NET INCOME — LIMITED PARTNERS | | $ | 67.9 | | | $ | 56.7 | |
| | | | | | | | |
NET INCOME — GENERAL PARTNER | | $ | 16.8 | | | $ | 6.7 | |
| | | | | | | | |
BASIC NET INCOME PER LIMITED PARTNER UNIT | | | | | | | | |
Income before cumulative effect of change in accounting principle | | $ | 0.62 | | | $ | 0.65 | |
Cumulative effect of change in accounting principle | | | — | | | | 0.08 | |
| | | | | | | | |
Basic net income per limited partner unit | | $ | 0.62 | | | $ | 0.73 | |
| | | | | | | | |
DILUTED NET INCOME PER LIMITED PARTNER UNIT | | | | | | | | |
Income before cumulative effect of change in accounting principle | | $ | 0.61 | | | $ | 0.63 | |
Cumulative effect of change in accounting principle | | | — | | | | 0.08 | |
| | | | | | | | |
Diluted net income per limited partner unit | | $ | 0.61 | | | $ | 0.71 | |
| | | | | | | | |
BASIC WEIGHTED AVERAGE UNITS OUTSTANDING | | | 109.4 | | | | 74.0 | |
| | | | | | | | |
DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING | | | 110.7 | | | | 75.7 | |
| | | | | | | | |
| | |
(1) | | Revenues and purchases include buy/sell transactions of $4.8 billion in the three months ended March 31, 2006. |
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
OPERATING DATA(1)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
Transportation activities (Average Daily Volumes, thousands of barrels): | | | | | | | | |
Tariff activities | | | | | | | | |
All American | | | 50 | | | | 44 | |
Basin | | | 342 | | | | 314 | |
BOA/CAM | | | 181 | | | | N/A | |
Capline | | | 235 | | | | 86 | |
Line 63 / 2000 | | | 181 | | | | N/A | |
Salt Lake City | | | 61 | | | | N/A | |
North Dakota/Trenton | | | 95 | | | | 82 | |
West Texas/New Mexico area systems(2) | | | 368 | | | | 399 | |
Manito | | | 74 | | | | 66 | |
Other | | | 908 | | | | 823 | |
| | | | | | | | |
| | | 2,495 | | | | 1,814 | |
Refined products | | | 115 | | | | N/A | |
| | | | | | | | |
Transportation activities total | | | 2,610 | | | | 1,814 | |
| | | | | | | | |
Facilities activities: | | | | | | | | |
Crude oil, refined products, and LPG storage (average monthly capacity in millions of barrels) | | | 35.2 | | | | 16.8 | |
| | | | | | | | |
Natural gas storage, net to our 50% interest (average monthly capacity in billions of cubic feet) | | | 12.9 | | | | 11.5 | |
| | | | | | | | |
LPG processing (thousands of barrels per day) | | | 13.7 | | | | N/A | |
| | | | | | | | |
Facilities activities total (average monthly capacity in millions of barrels)(3) | | | 37.8 | | | | 18.7 | |
| | | | | | | | |
Marketing activities (Average Daily Volumes, thousands of barrels): | | | | | | | | |
Crude oil lease gathering | | | 680 | | | | 615 | |
Refined products | | | 3 | | | | N/A | |
LPG sales | | | 133 | | | | 84 | |
Waterborne foreign crude imported | | | 67 | | | | 48 | |
| | | | | | | | |
Marketing activities total | | | 883 | | | | 747 | |
| | | | | | | | |
| | |
(1) | | Volumes associated with acquisitions represent total volumes transported for the number of days we actually owned the assets divided by the number of days in the period. |
|
(2) | | The aggregate of multiple systems in the West Texas/New Mexico area. |
|
(3) | | In order to calculate total facilities activities volume add: (i) crude oil, refined products and LPG storage capacity; (ii) natural gas storage capacity divided by 6 to account for the 6:1 mcf of gas to crude oil barrel ratio; and (iii) LPG processing volumes multiplied by the number of days in the month and divided by 1,000 to convert to monthly volumes in millions. |
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In millions)
| | | | | | | | |
| | March 31,
| | | December 31,
| |
| | 2007 | | | 2006 | |
|
ASSETS |
Current assets | | $ | 2,809.5 | | | $ | 3,157.6 | |
Property and equipment, net | | | 3,958.7 | | | | 3,842.0 | |
Pipeline linefill in owned assets | | | 271.0 | | | | 265.5 | |
Inventory in third party assets | | | 76.0 | | | | 75.7 | |
Equity investment in unconsolidated entities | | | 195.7 | | | | 183.0 | |
Goodwill | | | 1,035.1 | | | | 1,026.2 | |
Other long-term assets, net | | | 167.0 | | | | 164.9 | |
| | | | | | | | |
Total assets | | $ | 8,513.0 | | | $ | 8,714.9 | |
| | | | | | | | |
|
LIABILITIES AND PARTNERS’ CAPITAL |
Current liabilities | | $ | 2,850.6 | | | $ | 3,024.7 | |
Long-term debt under credit facilities and other | | | 3.0 | | | | 3.1 | |
Senior notes, net of unamortized discount | | | 2,623.1 | | | | 2,623.2 | |
Other long-term liabilities and deferred credits | | | 92.7 | | | | 87.1 | |
| | | | | | | | |
Total liabilities | | | 5,569.4 | | | | 5,738.1 | |
Partners’ capital | | | 2,943.6 | | | | 2,976.8 | |
| | | | | | | | |
Total liabilities and partners’ capital | | $ | 8,513.0 | | | $ | 8,714.9 | |
| | | | | | | | |
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY(unaudited)
COMPUTATION OF BASIC AND DILUTED EARNINGS PER LIMITED PARTNER UNIT
(In millions, except per unit data)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
Numerator for basic and diluted earnings per limited partner unit: | | | | | | | | |
Net income | | $ | 84.7 | | | $ | 63.4 | |
Less: General partner’s incentive distribution paid | | | (15.3 | ) | | | (5.5 | ) |
| | | | | | | | |
Subtotal | | | 69.4 | | | | 57.9 | |
Less: General partner 2% ownership | | | (1.5 | ) | | | (1.2 | ) |
| | | | | | | | |
Net income available to limited partners | | | 67.9 | | | | 56.7 | |
Pro forma additional general partner’s distribution(1) | | | — | | | | (2.9 | ) |
| | | | | | | | |
Net income available for limited partners under EITF03-06 | | | 67.9 | | | | 53.8 | |
Less: Limited partner 98% portion of cumulative effect of change in accounting principle | | | — | | | | 6.2 | |
| | | | | | | | |
Limited partner net income before cumulative effect of change in accounting principle | | $ | 67.9 | | | $ | 47.6 | |
| | | | | | | | |
Denominator: | | | | | | | | |
Basic weighted average number of limited partner units outstanding | | | 109.4 | | | | 74.0 | |
Effect of dilutive securities: | | | | | | | | |
Weighted average LTIP units | | | 1.3 | | | | 1.7 | |
| | | | | | | | |
Diluted weighted average number of limited partner units outstanding | | | 110.7 | | | | 75.7 | |
| | | | | | | | |
Basic net income per limited partner unit before cumulative effect of change in accounting principle(1) | | $ | 0.62 | | | $ | 0.65 | |
Cumulative effect of change in accounting principle per limited partner unit | | | — | | | | 0.08 | |
| | | | | | | | |
Basic net income per limited partner unit | | $ | 0.62 | | | $ | 0.73 | |
| | | | | | | | |
Diluted net income per limited partner unit before cumulative effect of change in accounting principle(1) | | $ | 0.61 | | | $ | 0.63 | |
Cumulative effect of change in accounting principle per limited partner unit | | | — | | | | 0.08 | |
| | | | | | | | |
Diluted net income per limited partner unit | | $ | 0.61 | | | $ | 0.71 | |
| | | | | | | | |
| | |
(1) | | Reflects pro forma full distribution of earnings under EITF03-06. The application of EITF03-06 negatively impacted basic and diluted earnings per limited partner unit by approximately $0.04 for the three months ended March 31, 2006. There was no impact of EITF03-06 for the three months ended March 31, 2007. |
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY(unaudited)
FINANCIAL DATA RECONCILIATIONS
(In millions, except per unit data)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) | | | | | | | | |
Net income reconciliation | | | | | | | | |
EBITDA | | $ | 165.8 | | | $ | 100.3 | |
Depreciation and amortization | | | (39.9 | ) | | | (21.6 | ) |
| | | | | | | | |
Earnings before interest and taxes (“EBIT”) | | | 125.9 | | | | 78.7 | |
Interest expense | | | (41.1 | ) | | | (15.3 | ) |
Income tax expense | | | (0.1 | ) | | | — | |
| | | | | | | | |
Net income | | $ | 84.7 | | | $ | 63.4 | |
| | | | | | | | |
Cash flow from operating activities reconciliation | | | | | | | | |
EBITDA | | $ | 165.8 | | | $ | 100.3 | |
Interest expense | | | (41.1 | ) | | | (15.3 | ) |
Income tax expense | | | (0.1 | ) | | | — | |
Net change in assets and liabilities, net of acquisitions | | | 218.0 | | | | (548.8 | ) |
Other items to reconcile to cash flows from operating activities: | | | | | | | | |
Cumulative effect of change in accounting principle | | | — | | | | (6.3 | ) |
Equity earnings in unconsolidated entities | | | (3.6 | ) | | | (0.1 | ) |
Inventory valuation adjustment | | | 1.0 | | | | — | |
Gain on sale of investment assets | | | (3.9 | ) | | | — | |
Net (gain) / loss on foreign currency revaluation | | | (0.2 | ) | | | 0.9 | |
SFAS 133mark-to-market adjustment | | | 17.0 | | | | 0.7 | |
LTIP charge | | | 18.6 | | | | 10.6 | |
Non-cash amortization of terminated interest rate hedging instruments | | | 0.2 | | | | 0.4 | |
| | | | | | | | |
Net cash provided by (used in) operating activities | | $ | 371.7 | | | $ | (457.6 | ) |
| | | | | | | | |
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
Funds flow from operations (“FFO”) | | | | | | | | |
Net income | | $ | 84.7 | | | $ | 63.4 | |
Undistributed equity earnings in unconsolidated entities | | | (3.4 | ) | | | 0.3 | |
Depreciation and amortization | | | 39.9 | | | | 21.6 | |
Non-cash amortization of terminated interest rate hedging instruments | | | 0.2 | | | | 0.4 | |
| | | | | | | | |
FFO | | | 121.4 | | | | 85.7 | |
Maintenance capital expenditures | | | (10.7 | ) | | | (4.7 | ) |
| | | | | | | | |
FFO after maintenance capital expenditures | | $ | 110.7 | | | $ | 81.0 | |
| | | | | | | | |
– MORE –
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
FINANCIAL DATA RECONCILIATIONS
(in millions, except per unit data) (continued)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
Selected items impacting comparability | | | | | | | | |
LTIP charge(1) | | $ | (17.9 | ) | | $ | (10.6 | ) |
Cumulative effect of change in accounting principle — LTIP(2) | | | — | | | | 6.3 | |
Loss on foreign currency revaluation | | | — | | | | (0.9 | ) |
SFAS 133mark-to-market adjustment | | | (17.0 | ) | | | (0.7 | ) |
| | | | | | | | |
Selected items impacting comparability | | | (34.9 | ) | | | (5.9 | ) |
Less: GP 2% portion of selected items impacting comparability | | | 0.7 | | | | 0.1 | |
| | | | | | | | |
LP 98% portion of selected items impacting comparability | | $ | (34.2 | ) | | $ | (5.8 | ) |
| | | | | | | | |
Impact to basic net income per limited partner unit(3) | | $ | (0.31 | ) | | $ | (0.11 | ) |
| | | | | | | | |
Impact to diluted net income per limited partner unit(3) | | $ | (0.31 | ) | | $ | (0.11 | ) |
| | | | | | | | |
| | |
(1) | | The LTIP charge for the three month period ended March 31, 2007 excludes the portion of the LTIP expense represented by LTIP grants under the 2006 Plan that, pursuant to the terms of the Plan, will be settled in cash only and has no impact on diluted units. |
|
(2) | | During the first quarter of 2006, we adopted SFAS No. 123(R) “Share Based Payment,” which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements at fair value. The cumulative effect adjustment represented a decrease to our LTIPlife-to-date accrued expense and related liability, and therefore resulted in a non-cash gain of $6.3 million in the first quarter of 2006. |
|
(3) | | In periods when the Partnership’s net income exceeds the cash distribution paid during such periods the application ofEmerging Issues Task Force IssueNo. 03-06: “Participating Securities and the Two Class Method under FASB Statement No. 128” (“EITF03-06”)does not impact the partnership’s aggregate net income or EBITDA, but does reduce the Partnership’s net income per limited partner unit. The application of EITF03-06 negatively impacted basic and diluted earnings per limited partner unit by $0.04 for the three months ended March 31, 2006; however, there was no impact of EITF03-06 for the three months ended March 31, 2007. |
– MORE –
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
FINANCIAL DATA RECONCILIATIONS
(in millions, except per unit data) (continued)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
Net income and earnings per limited partner unit excluding selected items impacting comparability | | | | | | | | |
Net income | | $ | 84.7 | | | $ | 63.4 | |
Selected items impacting comparability | | | 34.9 | | | | 5.9 | |
| | | | | | | | |
Adjusted net income | | $ | 119.6 | | | $ | 69.3 | |
| | | | | | | | |
Net income available for limited partners under EITF03-06 | | $ | 67.9 | | | $ | 53.8 | |
Limited partners 98% of selected items impacting comparability | | | 34.2 | | | | 5.8 | |
Pro forma additional general partner distribution under EITF03-06 | | | — | | | | 2.9 | |
| | | | | | | | |
Adjusted limited partners net income | | $ | 102.1 | | | $ | 62.5 | |
| | | | | | | | |
Adjusted basic net income per limited partner unit | | $ | 0.93 | | | $ | 0.84 | |
| | | | | | | | |
Adjusted diluted net income per limited partner unit | | $ | 0.92 | | | $ | 0.82 | |
| | | | | | | | |
Basic weighted average units outstanding | | | 109.4 | | | | 74.0 | |
| | | | | | | | |
Diluted weighted average units outstanding | | | 110.7 | | | | 75.7 | |
| | | | | | | | |
– MORE –
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
FINANCIAL SUMMARY (unaudited)
FINANCIAL DATA RECONCILIATIONS
(in millions, except per unit data) (continued)
| | | | | | | | |
| | Three Months Ended
| |
| | March 31, | |
| | 2007 | | | 2006 | |
|
EBITDA excluding selected items impacting comparability | | | | | | | | |
EBITDA | | $ | 165.8 | | | $ | 100.3 | |
Selected items impacting comparability | | | 34.9 | | | | 5.9 | |
| | | | | | | | |
Adjusted EBITDA | | $ | 200.7 | | | $ | 106.2 | |
| | | | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended
| |
| | March 31, 2007 | |
| | Transportation | | | Facilities | | | Marketing | |
|
2007 Segment profit excluding selected items impacting comparability | | | | | | | | | | | | |
Reported segment profit | | $ | 73.1 | | | $ | 21.9 | | | $ | 66.0 | |
Selected items impacting comparability of segment profit: | | | | | | | | | | | | |
LTIP charge | | | 9.2 | | | | 2.0 | | | | 6.7 | |
SFAS 133mark-to-market adjustment | | | — | | | | — | | | | 17.0 | |
| | | | | | | | | | | | |
Segment profit excluding selected items impacting comparability | | $ | 82.3 | | | $ | 23.9 | | | $ | 89.7 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended
| |
| | March 31, 2006 | |
| | Transportation | | | Facilities | | | Marketing | |
|
2006 Segment profit excluding selected items impacting comparability | | | | | | | | | | | | |
Reported segment profit | | $ | 38.1 | | | $ | 2.5 | | | $ | 53.1 | |
Selected items impacting comparability of segment profit: | | | | | | | | | | | | |
LTIP charge | | | 5.1 | | | | 1.2 | | | | 4.3 | |
Gain on foreign currency revaluation | | | — | | | | — | | | | 0.9 | |
SFAS 133mark-to-market adjustment | | | — | | | | — | | | | 0.7 | |
| | | | | | | | | | | | |
Segment profit excluding selected items impacting comparability | | $ | 43.2 | | | $ | 3.7 | | | $ | 59.0 | |
| | | | | | | | | | | | |
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