EXHIBIT 99.4
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Plains All American Pipeline is a limited partnership formed in the third
quarter of 1998 to acquire and operate the midstream crude oil business and
assets of Plains Resources and its wholly owned subsidiaries. The following
unaudited pro forma consolidated financial statements are presented to give
effect to the transactions described below:
(1) The Murphy acquisition for approximately $161.0 million in cash funded
from the bank credit facility. The acquisition was effective April 1,
2001 and was accounted for using the purchase method of accounting.
(2) The public offering of 3,966,700 common units at a price of $26.05 per
unit, which raised approximately $100.7 million of total net proceeds.
(3) The application of the proceeds from the offering of common units to
repay a portion of our borrowings outstanding under the bank credit
facility.
(4) The issuance of the notes in aggregate principal amount of $350.0
million.
(5) The application of the proceeds from the notes to repay a portion of
our borrowings outstanding under the bank credit facility.
The unaudited pro forma consolidated balance sheet as of March 31, 2001 and
the unaudited pro forma statements of income for the three months ended March
31, 2001 and the year ended December 31, 2000 are based upon the following,
respectively:
(1) The historical balance sheet of Plains All American Pipeline at March
31, 2001.
(2) The historical consolidated statement of income of Plains All American
Pipeline for the three months ended March 31, 2001 and the historical
statement of income for the assets acquired in the Murphy acquisition
for the same period.
(3) The historical consolidated statement of income of Plains All American
Pipeline for the year ended December 31, 2000 and the historical
statement of income for the assets acquired in the Murphy acquisition
for the same period.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of the results of the actual or future operations or
financial condition that would have been achieved had the transactions occurred
at the dates assumed (as noted below). The unaudited pro forma consolidated
financial statements should be read in conjunction with the notes thereto and
the historical financial statements of Plains All American Pipeline and the
assets acquired in the Murphy acquisition.
The following unaudited pro forma consolidated statements of income for the
three months ended March 31, 2001 and the year ended December 31, 2000 have
been prepared as if the transactions described above had taken place on January
1, 2000 and the unaudited pro forma consolidated balance sheet at March 31,
2001 assumes the transactions were consummated on March 31, 2001.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 2001
------------------------------------------------------------------------------------------------------------
Plains All
American Pro Forma
Adjusted for the Pro Forma Plains All
Plains All Pro Forma Pro Forma Murphy Acquisition Notes American
American Acquisition Equity Offering and the Equity Offering Pro Forma
Historical Adjustments Total Adjustments Offering Adjustments As Adjusted
---------- ----------- ---------- --------------- ------------------ ----------- -----------
(in thousands)
ASSETS
Current Assets:
Cash and cash
equivalents.... $ 1,202 $161,000 (1) $ 1,202 $100,739 (3) $ 1,202 $345,200 (6) $ 69,591
(161,000) (2) (100,739) (4) (276,811) (7)
Accounts
receivable and
other.......... 328,567 -- 328,567 -- 328,567 -- 328,567
Inventory....... 73,924 6,962 (2) 80,886 -- 80,886 -- 80,886
-------- -------- ---------- -------- ---------- -------- ----------
Total current
assets......... 403,693 6,962 410,655 -- 410,655 68,389 479,044
-------- -------- ---------- -------- ---------- -------- ----------
Property and
Equipment...... 468,978 150,448 (2) 619,426 -- 619,426 -- 619,426
Less allowance
for
depreciation
and
amortization... (30,933) -- (30,933) -- (30,933) -- (30,933)
-------- -------- ---------- -------- ---------- -------- ----------
438,045 150,448 588,493 -- 588,493 -- 588,493
-------- -------- ---------- -------- ---------- -------- ----------
Other Assets:
Pipeline
linefill....... 33,924 2,337 (2) 36,261 -- 36,261 -- 36,261
Other........... 13,815 1,253 (2) 15,068 -- 15,068 4,800 (6) 19,868
-------- -------- ---------- -------- ---------- -------- ----------
$889,477 $161,000 $1,050,477 $ -- $1,050,477 $ 73,189 1,123,666
======== ======== ========== ======== ========== ======== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current
Liabilities:
Accounts payable
and other
current
liabilities.... $342,460 $ -- $ 342,460 $ -- $ 342,460 $ -- $ 342,460
Due to
affiliates..... 21,273 -- 21,273 -- 21,273 -- 21,273
-------- -------- ---------- -------- ---------- -------- ----------
Total current
liabilities.... 363,733 -- 363,733 -- 363,733 -- 363,733
Long-Term
Liabilities:
Bank debt....... 316,550 161,000 (1) 477,550 (100,739) (4) 376,811 (276,811) (7) 100,000
Senior notes.... -- -- -- -- -- 350,000 (6) 350,000
Other........... 1,009 -- 1,009 -- 1,009 -- 1,009
-------- -------- ---------- -------- ---------- -------- ----------
Total
liabilities.... 681,292 161,000 842,292 (100,739) 741,553 73,189 814,742
-------- -------- ---------- -------- ---------- -------- ----------
Partners'
Capital:
Partners'
capital........ 210,840 -- 210,840 100,739 (3) 311,579 -- 311,579
Other
comprehensive
income......... (2,655) -- (2,655) -- (2,655) -- (2,655)
-------- -------- ---------- -------- ---------- -------- ----------
208,185 -- 208,185 100,739 308,924 -- 308,924
-------- -------- ---------- -------- ---------- -------- ----------
$889,477 $161,000 $1,050,477 $ -- $1,050,477 $ 73,189 $1,123,666
======== ======== ========== ======== ========== ======== ==========
See notes to unaudited pro forma consolidated financial statements.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 2001
-------------------------------------------------------------------------------------
Plains All
Pro Forma American
Plains All Pro Forma Equity and Notes Pro Forma
American Murphy Acquisition Offerings As
Historical Acquisition Adjustments Total Adjustments Adjusted
---------- ----------- ----------- ---------- ---------------- ----------
(in thousands, except per unit data)
Revenues................ $1,520,124 $161,265 $ -- $1,681,389 $ -- $1,681,389
Cost of sales and
operations............. 1,487,394 154,787 306 (8) 1,642,487 -- 1,642,487
---------- -------- ------- ---------- ------ ----------
Gross Margin............ 32,730 6,478 (306) 38,902 -- 38,902
---------- -------- ------- ---------- ------ --- ----------
Expenses:
General and
administrative......... 8,989 493 (363) (9) 9,233 -- 9,233
114 (10)
Depreciation and
amortization........... 4,670 700 (700) (12) 6,607 -- 6,607
1,937 (11)
---------- -------- ------- ---------- ------ ----------
Total expenses........ 13,659 1,193 988 15,840 -- 15,840
---------- -------- ------- ---------- ------ ----------
Operating income........ 19,071 5,285 (1,294) 23,062 -- 23,062
Interest expense........ (6,606) -- (3,017) (13) (9,623) (203) (5) (9,826)
Interest and other
income................. 42 -- -- 42 -- 42
---------- -------- ------- ---------- ------ ----------
Income from continuing
operations before
income taxes and
cumulative effect of
accounting change...... 12,507 5,285 (4,311) 13,481 (203) 13,278
Income tax expense...... -- 2,327 (2,327) (14) -- -- --
---------- -------- ------- ---------- ------ ----------
Income from continuing
operations before
cumulative effect of
accounting change...... $ 12,507 $ 2,958 $(1,984) $ 13,481 $ (203) $ 13,278
========== ======== ======= ========== ====== ==========
Basic and diluted
earnings per limited
partner unit........... $ 0.36 $ 0.38 $ 0.05 $ 0.34
========== ========== ====== ==========
Weighted average number
of units outstanding... 34,386 34,386 3,967 38,353
========== ========== ====== ==========
See notes to unaudited pro forma consolidated financial statements.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2000
-------------------------------------------------------------------------------------
Plains All
Pro Forma American
Plains All Pro Forma Equity and Notes Pro Forma
American Murphy Acquisition Offerings As
Historical Acquisition Adjustments Total Adjustments Adjusted
---------- ----------- ----------- ---------- ---------------- ----------
(in thousands, except per unit data)
Revenues................ $6,641,187 $667,323 $ 2,207 (15) $7,310,717 $ -- $7,310,717
Cost of sales and
operations............. 6,506,504 648,334 821 (15) 7,156,530 -- 7,156,530
871 (8)
Unauthorized trading
losses and related
expenses............... 6,963 -- -- 6,963 -- 6,963
---------- -------- -------- ---------- ----- ----------
Gross margin............ 127,720 18,989 515 147,224 -- 147,224
---------- -------- -------- ---------- ----- ----------
Expenses:
General and
administrative......... 40,821 1,834 583 (9) 43,693 -- 43,693
455 (10)
Depreciation and
amortization........... 24,523 2,660 (2,660) (12) 32,270 -- 32,270
7,747 (11)
---------- -------- -------- ---------- ----- ----------
Total expenses........ 65,344 4,494 6,125 75,963 -- 75,963
---------- -------- -------- ---------- ----- ----------
Operating income........ 62,376 14,495 (5,610) 71,261 -- 71,261
Interest expense........ (28,691) -- (12,069) (13) (40,760) (811) (5) (41,571)
Gain on sale of assets.. 48,188 -- -- 48,188 -- 48,188
Interest and other
income................. 10,776 -- -- 10,776 -- 10,776
---------- -------- -------- ---------- ----- ----------
Income from continuing
operations before
income taxes and
extraordinary item..... 92,649 14,495 (17,679) 89,465 811 88,654
Income tax expense...... -- 6,598 (6,598) (14) -- -- --
---------- -------- -------- ---------- ----- ----------
Income from continuing
operations before
extraordinary item..... $ 92,649 $ 7,897 $(11,081) $ 89,465 $ 811 $ 88,654
========== ======== ======== ========== ===== ==========
Basic and diluted
earnings per limited
partner unit........... $ 2.64 $ 2.55 $0.20 $ 2.27
========== ========== ===== ==========
Weighted average number
of units outstanding... 34,386 34,386 3,967 38,353
========== ========== ===== ==========
See notes to unaudited pro forma consolidated financial statements.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Adjustments
1. Reflects the net proceeds of borrowings under the bank credit facility
to fund the Murphy acquisition.
2. Records the assets purchased from Murphy based on the purchase method of
accounting.
3. Reflects the estimated net proceeds to Plains All American Pipeline of
$100.7 million from the second quarter of 2001 issuance of 3,966,700 common
units at an offering price of $26.05 per common unit, net of underwriters'
discounts and commissions and offering expenses of approximately $4.7 million
and the general partner's capital contribution of approximately $2.1 million
to maintain its aggregate 2% general partner interest.
4. Reflects the repayment of approximately $100.7 million of debt
outstanding under our bank credit facility with the total net proceeds from
our second quarter of 2001 equity offering.
5. Reflects adjustments to interest expense to account for (i) the
repayment of approximately $100.7 million of debt outstanding under our bank
credit facility with the total net proceeds from our second quarter of 2001
equity offering, (ii) the repayment of outstanding borrowings under our bank
credit facility with net proceeds raised in the notes offering and (iii) the
increase in total long term debt of $350.0 million from proceeds raised in the
notes offering.
6. Reflects the estimated net proceeds to Plains All American Pipeline of
$345.2 million from the issuance of $350.0 million aggregate principal amount
of notes, net of initial purchasers' discounts and estimated issuance expenses
of approximately $4.8 million.
7. Reflects the repayment of outstanding borrowings under the bank credit
facility at March 31, 2001 from net proceeds raised in the notes offering.
8. Reflects the adjustment of the historical market valuation charge/credit
reflected in Murphy's historical financial statements to reflect such amounts
based on the average cost inventory method utilized by Plains All American
Pipeline. Murphy utilized the last-in, first-out method to determine inventory
cost.
9. Reflects the elimination of expenses associated with Murphy's pension
plan in which Murphy's employees are no longer entitled to participate so that
general and administrative expenses reflect the ongoing cost of employee
benefits to Plains All American Pipeline.
10. Reflects Canadian withholding tax (at the rate of 10%) on interest
expense paid on an intercompany loan used to complete the Murphy acquisition.
11. Reflects pro forma depreciation and amortization expense based on the
purchase price of the Murphy acquisition. The pro forma composite useful
depreciable life of the Murphy assets acquired is 20 years. Debt issue costs
incurred in connection with the acquisition, which totaled $1.3 million, are
amortized using the straight-line method over the term of the related debt.
These costs are not materially different from the amortization of debt issue
costs computed under the interest method.
12. Reflects the elimination of historical Murphy depreciation and
amortization expense.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
13. Reflects pro forma interest expense on (i) borrowings of approximately
$100 million under the Term Loan and (ii) borrowings of $61 million under the
U.S. Revolver. Pro forma interest expense was calculated based on a composite
annual interest rate of 7.5%. The effect of a 1/8% change in the pro forma
interest rate would be approximately $200,000 for the year ended December 31,
2000 and $50,000 for the three month period ended March 31, 2001.
14. Reflects the elimination of the historical income tax provision as
income taxes will be borne by the partners and not Plains All American
Pipeline.
15. Reflects revenues and costs of sales related to the Manito pipeline
system for January through June 2000 due to the fact that Murphy purchased the
remaining 47.5% interest in the system effective July, 2000.
Pro Forma As Adjusted Earnings Per Limited Partner Unit
Pro forma as adjusted earnings per limited partner unit is determined by
dividing the pro forma income from continuing operations that would have been
allocated to the common and subordinated unitholders, which is 98% of pro forma
income from continuing operations, by the number of common and subordinated
units expected to be outstanding at the closing of the offering. For purposes
of this calculation the minimum quarterly distribution was assumed to have been
paid to both common and subordinated unitholders and the number of common and
subordinated units outstanding was assumed to have been outstanding the entire
period. Pursuant to the partnership agreement, to the extent that the minimum
quarterly distribution is exceeded, the general partner is entitled to certain
incentive distributions which will result in less income proportionately being
allocated to the common and subordinated unitholders. Basic and diluted pro
forma earnings per limited partner common and subordinated unit are equal as
there are no dilutive units.
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