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

Plains All American Pipeline, L.P.

Summary Financial Information (unaudited)
(in millions, except per unit data)

Three Months Ended
December 31,

%

Twelve Months Ended
December 31,

%

GAAP Results

2019

2018

Change

2019

2018

Change

Net income attributable to PAA

$

306

$

1,117

(73)

%

$

2,171

$

2,216

(2)

%

Diluted net income per common unit

$

0.35

$

1.38

(75)

%

$

2.65

$

2.71

(2)

%

Diluted weighted average common units outstanding (1)

729

799

(9)

%

800

799

—

%

Distribution per common unit declared for the period

$

0.36

$

0.30

20

%

$

1.44

$

1.20

20

%

(1)

For the twelve months ended December 31, 2019 and the three and twelve months ended December 31, 2018, 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
December 31,

%

Twelve Months Ended
December 31,

%

Non-GAAP Results (1)

2019

2018

Change

2019

2018

Change

Adjusted net income attributable to PAA

$

517

$

653

(21)

%

$

2,063

$

1,570

31

%

Diluted adjusted net income per common unit

$

0.63

$

0.80

(21)

%

$

2.51

$

1.88

34

%

Adjusted EBITDA

$

860

$

949

(9)

%

$

3,237

$

2,684

21

%

Implied DCF per common unit

$

0.72

$

0.94

(23)

%

$

2.99

$

2.46

22

%

(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.

Summary of Selected Financial Data by Segment (unaudited)

(in millions)

Segment Adjusted EBITDA

Transportation

Facilities

Supply and Logistics

Three Months Ended December 31, 2019

$

451

$

176

$

232

Three Months Ended December 31, 2018

$

425

$

181

$

342

Percentage change in Segment Adjusted EBITDA versus 2018 period

6

%

(3)

%

(32)

%

Segment Adjusted EBITDA

Transportation

Facilities

Supply and Logistics

Twelve Months Ended December 31, 2019

$

1,722

$

705

$

803

Twelve Months Ended December 31, 2018

$

1,508

$

711

$

462

Percentage change in Segment Adjusted EBITDA versus 2018 period

14

%

(1)

%

74

%

Percentage change in Segment Adjusted EBITDA versus 2018 period further adjusted for impact of divested assets (1)

19

%

(1)

%

N/A

Estimated impact of divestitures completed during 2018 and 2019, assuming an effective date of January 1, 2018. Divested assets primarily included a 30% interest in BridgeTex Pipeline Company, LLC and certain pipelines in the Rocky Mountain region that were previously reported in our Transportation segment, and a natural gas processing facility and certain crude oil and NGL terminals that were previously reported in our Facilities segment.

Financial and Operating Guidance (unaudited)

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

Twelve Months Ended December 31,

2018

2019

2020 (G)

+ / -

Segment Adjusted EBITDA

Transportation

$

1,508

$

1,722

$

1,820

Facilities

711

705

680

Fee-Based

$

2,219

$

2,427

$

2,500

Supply and Logistics

462

803

75

Adjusted other income/(expense), net

3

7

—

Adjusted EBITDA (1)

$

2,684

$

3,237

$

2,575

Interest expense, net of certain non-cash items (2)

(419

)

(407

)

(410

)

Maintenance capital

(252

)

(287

)

(250

)

Current income tax expense

(66

)

(112

)

(60

)

Other

1

(55

)

(5

)

Implied DCF (1)

$

1,948

$

2,376

$

1,850

Preferred unit distributions paid (3)

(161

)

(198

)

(200

)

Implied DCF Available to Common Unitholders

$

1,787

$

2,178

$

1,650

Implied DCF per Common Unit (1)

$

2.46

$

2.99

$

2.27

Implied DCF per Common Unit and Common Equivalent Unit (1)

$

2.38

$

2.91

$

2.25

Distributions per Common Unit (4)

$

1.20

$

1.38

$

1.44

Common Unit Distribution Coverage Ratio

2.05

2.17

1.57

Diluted Adjusted Net Income per Common Unit (1)

$

1.88

$

2.51

$

1.66

Operating Data

Transportation

Average daily volumes (MBbls/d)

5,889

6,893

7,600

Segment Adjusted EBITDA per barrel

$

0.70

$

0.68

$

0.65

Facilities

Average capacity (MMBbls/Mo)

124

125

124

Segment Adjusted EBITDA per barrel

$

0.48

$

0.47

$

0.46

Supply and Logistics

Average daily volumes (MBbls/d)

1,309

1,369

1,450

Segment Adjusted EBITDA per barrel

$

0.97

$

1.61

$

0.14

Expansion Capital

$

1,888

$

1,340

$

1,400

First-Quarter Adjusted EBITDA as Percentage of Full Year

22

%

27

%

27-28

(G)

2020 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 2018 and 2019 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. Distributions on our Series A preferred units were paid-in-kind for the February 2018 quarterly distribution. Distributions on our Series A preferred units have been paid in cash since the May 2018 quarterly distribution. Distributions on our Series B preferred units are payable in cash semi-annually in arrears on May 15 and November 15.

(4)

Cash distributions per common unit paid during 2018 and 2019. 2020(G) reflects the current distribution rate of $1.44 per common unit.

Q4 2019

Q3 2019

Q4 2018

Distribution per Class A share declared for the period

$

0.36

$

0.36

$

0.30

Q4 2019 distribution percentage change from prior periods

—

%

20

%

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
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

REVENUES

$

9,154

$

8,786

$

33,669

$

34,055

COSTS AND EXPENSES

Purchases and related costs

8,234

6,955

29,452

29,793

Field operating costs

320

332

1,303

1,263

General and administrative expenses

72

84

297

316

Depreciation and amortization

163

136

601

520

(Gains)/losses on asset sales and asset impairments, net

34

(36)

28

(114)

Total costs and expenses

8,823

7,471

31,681

31,778

OPERATING INCOME

331

1,315

1,988

2,277

OTHER INCOME/(EXPENSE)

Equity earnings in unconsolidated entities

115

93

388

375

Gain/(loss) on investment in unconsolidated entities

—

(10)

271

200

Interest expense, net

(114)

(104)

(425)

(431)

Other income/(expense), net

—

(14)

24

(7)

INCOME BEFORE TAX

332

1,280

2,246

2,414

Current income tax expense

(40)

(32)

(112)

(66)

Deferred income tax (expense)/benefit

15

(131)

46

(132)

NET INCOME

307

1,117

2,180

2,216

Net income attributable to noncontrolling interests

(1)

—

(9)

—

NET INCOME ATTRIBUTABLE TO PAA

$

306

$

1,117

$

2,171

$

2,216

NET INCOME PER COMMON UNIT:

Net income allocated to common unitholders — Basic

$

256

$

1,063

$

1,967

$

2,009

Basic weighted average common units outstanding

728

726

727

726

Basic net income per common unit

$

0.35

$

1.46

$

2.70

$

2.77

Net income allocated to common unitholders — Diluted

$

256

$

1,104

$

2,119

$

2,164

Diluted weighted average common units outstanding

729

799

800

799

Diluted net income per common unit

$

0.35

$

1.38

$

2.65

$

2.71

NON-GAAP ADJUSTED RESULTS

(in millions, except per unit data)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Adjusted net income attributable to PAA

$

517

$

653

$

2,063

$

1,570

Diluted adjusted net income per common unit

$

0.63

$

0.80

$

2.51

$

1.88

Adjusted EBITDA

$

860

$

949

$

3,237

$

2,684

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(in millions)

December 31,
2019

December 31,
2018

ASSETS

Current assets

$

4,612

$

3,533

Property and equipment, net

15,355

14,787

Goodwill

2,540

2,521

Investments in unconsolidated entities

3,683

2,702

Linefill and base gas

981

916

Long-term operating lease right-of-use assets, net

466

—

Long-term inventory

182

136

Other long-term assets, net

858

916

Total assets

$

28,677

$

25,511

LIABILITIES AND PARTNERS’ CAPITAL

Current liabilities

$

5,017

$

3,456

Senior notes, net

8,939

8,941

Other long-term debt, net

248

202

Long-term operating lease liabilities

387

—

Other long-term liabilities and deferred credits

891

910

Total liabilities

15,482

13,509

Partners’ capital excluding noncontrolling interests

13,062

12,002

Noncontrolling interests

133

—

Total partners’ capital

13,195

12,002

Total liabilities and partners’ capital

$

28,677

$

25,511

DEBT CAPITALIZATION RATIOS

(in millions)

December 31,
2019

December 31,
2018

Short-term debt

$

504

$

66

Long-term debt

9,187

9,143

Total debt

$

9,691

$

9,209

Long-term debt

$

9,187

$

9,143

Partners’ capital

13,195

12,002

Total book capitalization

$

22,382

$

21,145

Total book capitalization, including short-term debt

$

22,886

$

21,211

Long-term debt-to-total book capitalization

41

%

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
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Basic Net Income per Common Unit

Net income attributable to PAA

$

306

$

1,117

$

2,171

$

2,216

Distributions to Series A preferred unitholders

(37)

(37)

(149)

(149)

Distributions to Series B preferred unitholders

(12)

(12)

(49)

(49)

Other

(1)

(5)

(6)

(9)

Net income allocated to common unitholders

$

256

$

1,063

$

1,967

$

2,009

Basic weighted average common units outstanding

728

726

727

726

Basic net income per common unit

$

0.35

$

1.46

$

2.70

$

2.77

Diluted Net Income per Common Unit

Net income attributable to PAA

$

306

$

1,117

$

2,171

$

2,216

Distributions to Series A preferred unitholders

(37)

—

—

—

Distributions to Series B preferred unitholders

(12)

(12)

(49)

(49)

Other

(1)

(1)

(3)

(3)

Net income allocated to common unitholders

$

256

$

1,104

$

2,119

$

2,164

Basic weighted average common units outstanding

728

726

727

726

Effect of dilutive securities:

Series A preferred units (2)

—

71

71

71

Equity-indexed compensation plan awards (3)

1

2

2

2

Diluted weighted average common units outstanding

729

799

800

799

Diluted net income per common unit

$

0.35

$

1.38

$

2.65

$

2.71

(1)

We calculate net income allocated to common unitholders based on the distributions pertaining to the current period’s net income (whether paid in cash or in-kind). After adjusting for the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to common unitholders and participating securities in accordance with the contractual terms of our partnership agreement in effect for the period and as further prescribed under the two-class method.

(2)

The possible conversion of our Series A preferred units was excluded from the calculation of diluted net income per common unit for the three months ended December 31, 2019 as the effect was antidilutive.

(3)

Our equity-indexed compensation plan awards that contemplate the issuance of common units are considered dilutive unless (i) they become vested only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. Equity-indexed compensation plan awards that are deemed to be dilutive are reduced by a hypothetical common unit repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

SELECTED ITEMS IMPACTING COMPARABILITY

(in millions)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Selected Items Impacting Comparability: (1)

Gains/(losses) from derivative activities net of inventory valuation adjustments (2)

$

(234)

$

610

$

(158)

$

505

Long-term inventory costing adjustments (3)

22

(38)

20

(21)

Deficiencies under minimum volume commitments, net (4)

8

2

18

(7)

Equity-indexed compensation expense (5)

(4)

(19)

(17)

(55)

Net gain on foreign currency revaluation (6)

7

3

1

1

Line 901 incident (7)

—

—

(10)

—

Selected items impacting comparability - Adjusted EBITDA

$

(201)

$

558

$

(146)

$

423

Gains/(losses) from derivative activities (2)

—

—

(1)

4

Gain/(loss) on investment in unconsolidated entities

—

(10)

271

200

Gains/(losses) on asset sales and asset impairments, net

(34)

36

(28)

114

Tax effect on selected items impacting comparability

24

(120)

12

(95)

Selected items impacting comparability - Adjusted net income attributable to PAA

$

(211)

$

464

$

108

$

646

(1)

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

(2)

We use derivative instruments for risk management purposes and our related processes include specific identification of hedging instruments to an underlying hedged transaction. Although we identify an underlying transaction for each derivative instrument we enter into, there may not be an accounting hedge relationship between the instrument and the underlying transaction. In the course of evaluating our results of operations, we identify the earnings that were recognized during the period related to derivative instruments for which the identified underlying transaction does not occur in the current period and exclude the related gains and losses in determining adjusted results. In addition, we exclude gains and losses on derivatives that are related to investing activities, such as the purchase of linefill. We also exclude the impact of corresponding inventory valuation adjustments, as applicable, as well as the mark-to-market adjustment related to our Preferred Distribution Rate Reset Option.

(3)

We carry crude oil and NGL inventory comprised of minimum working inventory requirements in third-party assets and other working inventory that is needed for our commercial operations. We consider this inventory necessary to conduct our operations and we intend to carry this inventory for the foreseeable future. Therefore, we classify this inventory as long-term on our balance sheet and do not hedge the inventory with derivative instruments (similar to linefill in our own assets). We treat the impact of changes in the average cost of the long-term inventory (that result from fluctuations in market prices) and writedowns of such inventory that result from price declines as a selected item impacting comparability.

(4)

We have certain agreements that require counterparties to deliver, transport or throughput a minimum volume over an agreed upon period. Substantially all of such agreements were entered into with counterparties to economically support the return on our capital expenditure necessary to construct the related asset. Some of these agreements include make-up rights if the minimum volume is not met. We record a receivable from the counterparty in the period that services are provided or when the transaction occurs, including amounts for deficiency obligations from counterparties associated with minimum volume commitments. If a counterparty has a make-up right associated with a deficiency, we defer the revenue attributable to the counterparty’s make-up right and subsequently recognize the revenue at the earlier of when the deficiency volume is delivered or shipped, when the make-up right expires or when it is determined that the counterparty’s ability to utilize the make-up right is remote. We include the impact of amounts billed to counterparties for their deficiency obligation, net of applicable amounts subsequently recognized into revenue, as a selected item impacting comparability. We believe the inclusion of the contractually committed revenues associated with that period is meaningful to investors as the related asset has been constructed, is standing ready to provide the committed service and the fixed operating costs are included in the current period results.

(5)

Our total equity-indexed compensation expense includes expense associated with awards that will or may be settled in units and awards that will or may be settled in cash. The awards that will or may be settled in units are included in our diluted net income per unit calculation when the applicable performance criteria have been met. We consider the compensation expense associated with these awards as a selected item impacting comparability as the dilutive impact of the outstanding awards is included in our diluted net income per unit calculation and the majority of the awards are expected to be settled in units. The portion of compensation expense associated with awards that are certain to be settled in cash is not considered a selected item impacting comparability.

(6)

During the periods presented, there were fluctuations in the value of the Canadian dollar to the U.S. dollar, resulting in gains and losses that were not related to our core operating results for the period and were thus classified as a selected item impacting comparability.

(7)

Includes costs recognized during the period related to the Line 901 incident that occurred in May 2015, net of amounts we believe are probable of recovery from insurance.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

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

(in millions, except per unit data)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Basic Adjusted Net Income per Common Unit

Net income attributable to PAA

$

306

$

1,117

$

2,171

$

2,216

Selected items impacting comparability - Adjusted net income attributable to PAA (2)

211

(464)

(108)

(646)

Adjusted net income attributable to PAA

$

517

$

653

$

2,063

$

1,570

Distributions to Series A preferred unitholders

(37)

(37)

(149)

(149)

Distributions to Series B preferred unitholders

(12)

(12)

(49)

(49)

Other

(2)

(3)

(6)

(6)

Adjusted net income allocated to common unitholders

$

466

$

601

$

1,859

$

1,366

Basic weighted average common units outstanding

728

726

727

726

Basic adjusted net income per common unit

$

0.64

$

0.83

$

2.56

$

1.88

Diluted Adjusted Net Income per Common Unit

Net income attributable to PAA

$

306

$

1,117

$

2,171

$

2,216

Selected items impacting comparability - Adjusted net income attributable to PAA (2)

211

(464)

(108)

(646)

Adjusted net income attributable to PAA

$

517

$

653

$

2,063

$

1,570

Distributions to Series A preferred unitholders

—

—

—

(149)

Distributions to Series B preferred unitholders

(12)

(12)

(49)

(49)

Other

(1)

(1)

(3)

(4)

Adjusted net income allocated to common unitholders

$

504

$

640

$

2,011

$

1,368

Basic weighted average common units outstanding

728

726

727

726

Effect of dilutive securities:

Series A preferred units (3)

71

71

71

—

Equity-indexed compensation plan awards (4)

1

2

2

2

Diluted weighted average common units outstanding

800

799

800

728

Diluted adjusted net income per common unit

$

0.63

$

0.80

$

2.51

$

1.88

(1)

We calculate adjusted net income allocated to common unitholders based on the distributions pertaining to the current period’s net income (whether paid in cash or in-kind). After adjusting for the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to the common unitholders and participating securities in accordance with the contractual terms of our partnership agreement in effect for the period and as further prescribed under the two-class method.

(2)

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

(3)

The possible conversion of our Series A preferred units was excluded from the calculation of diluted adjusted net income per common unit for the twelve months ended December 31, 2018 as the effect was antidilutive.

(4)

Our equity-indexed compensation plan awards that contemplate the issuance of common units are considered dilutive unless (i) they become vested only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. Equity-indexed compensation plan awards that are deemed to be dilutive are reduced by a hypothetical common unit repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB.

FINANCIAL SUMMARY (unaudited)

NON-GAAP RECONCILIATIONS

Net Income Per Common Unit to Adjusted Net Income Per Common Unit Reconciliations:

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Basic net income per common unit

$

0.35

$

1.46

$

2.70

$

2.77

Selected items impacting comparability per common unit (1)

0.29

(0.63)

(0.14)

(0.89)

Basic adjusted net income per common unit

$

0.64

$

0.83

$

2.56

$

1.88

Diluted net income per common unit

$

0.35

$

1.38

$

2.65

$

2.71

Selected items impacting comparability per common unit (1)

0.28

(0.58)

(0.14)

(0.83)

Diluted adjusted net income per common unit

$

0.63

$

0.80

$

2.51

$

1.88

(1)

See the “Selected Items Impacting Comparability” and the “Computation of Basic and Diluted Adjusted Net Income Per Common Unit” tables for additional information.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

NON-GAAP RECONCILIATIONS (continued)

(in millions, except per unit and ratio data)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Net Income to Adjusted EBITDA and Implied DCF Reconciliation

Net Income

$

307

$

1,117

$

2,180

$

2,216

Interest expense, net

114

104

425

431

Income tax expense

25

163

66

198

Depreciation and amortization

163

136

601

520

(Gains)/losses on asset sales and asset impairments, net

34

(36)

28

(114)

(Gain)/loss on investment in unconsolidated entities

—

10

(271)

(200)

Depreciation and amortization of unconsolidated entities (1)

16

13

62

56

Selected items impacting comparability - Adjusted EBITDA (2)

201

(558)

146

(423)

Adjusted EBITDA

$

860

$

949

$

3,237

$

2,684

Interest expense, net of certain non-cash items (3)

(110)

(101)

(407)

(419)

Maintenance capital

(84)

(66)

(287)

(252)

Current income tax expense

(40)

(32)

(112)

(66)

Adjusted equity earnings in unconsolidated entities, net of distributions (4)

(37)

(9)

(49)

1

Distributions to noncontrolling interest (5)

(2)

—

(6)

—

Implied DCF

$

587

$

741

$

2,376

$

1,948

Preferred unit distributions paid (6)

(62)

(62)

(198)

(161)

Implied DCF Available to Common Unitholders

$

525

$

679

$

2,178

$

1,787

Weighted Average Common Units Outstanding

728

726

727

726

Weighted Average Common Units and Common Equivalent Units

799

797

798

797

Implied DCF per Common Unit (7)

$

0.72

$

0.94

$

2.99

$

2.46

Implied DCF per Common Unit and Common Equivalent Unit (8)

$

0.71

$

0.90

$

2.91

$

2.38

Cash Distribution Paid per Common Unit

$

0.36

$

0.30

$

1.38

$

1.20

Common Unit Cash Distributions (5)

$

262

$

218

$

1,004

$

871

Common Unit Distribution Coverage Ratio

2.00

x

3.11

x

2.17

x

2.05

x

Implied DCF Excess / (Shortage)

$

263

$

461

$

1,174

$

916

(1)

Adjustment to add back our proportionate share of depreciation and amortization expense and gains and losses on significant asset sales by unconsolidated entities.

(2)

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

(3)

Excludes certain non-cash items impacting interest expense such as amortization of debt issuance costs and terminated interest rate swaps.

(4)

Comprised of cash distributions received from unconsolidated entities less equity earnings in unconsolidated entities (adjusted for our proportionate share of depreciation and amortization and gains and losses on significant asset sales).

(5)

Cash distributions paid during the period presented.

(6)

Cash distributions paid to our preferred unitholders during the period presented. The current $0.5250 quarterly ($2.10 annualized) per unit distribution requirement of our Series A preferred units was paid-in-kind for each quarterly distribution from their issuance through February 2018. Distributions on our Series A preferred units have been paid in cash since the May 2018 quarterly distribution. The current $61.25 per unit annual distribution requirement of our Series B preferred units, is payable in cash semi-annually in arrears on May 15 and November 15.

(7)

Implied DCF Available to Common Unitholders for the period divided by the weighted average common units outstanding for the period.

(8)

Implied DCF Available to Common Unitholders for the period, adjusted for Series A preferred unit cash distributions paid (if any), divided by the weighted average common units and common equivalent units outstanding for the periods. Our Series A preferred units are convertible into common units, generally on a one-for-one basis and subject to customary anti-dilution adjustments, in whole or in part, subject to certain minimum conversion amounts.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

NON-GAAP RECONCILIATIONS (continued)

Net Income Per Common Unit to Implied DCF Per Common Unit and Common Equivalent Unit Reconciliation:

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2019

2018

2019

2018

Basic net income per common unit

$

0.35

$

1.46

$

2.70

$

2.77

Reconciling items per common unit (1) (2)

0.37

(0.52)

0.29

(0.31)

Implied DCF per common unit

$

0.72

$

0.94

$

2.99

$

2.46

Basic net income per common unit

$

0.35

$

1.46

$

2.70

$

2.77

Reconciling items per common unit and common equivalent unit (1) (3)

0.36

(0.56)

0.21

(0.39)

Implied DCF per common unit and common equivalent unit

$

0.71

$

0.90

$

2.91

$

2.38

(1)

Represents adjustments to Net Income to calculate Implied DCF Available to Common Unitholders. See the “Net Income to Adjusted EBITDA and Implied DCF Reconciliation” table for additional information.

(2)

Based on weighted average common units outstanding for the period of 728 million, 726 million, 727 million and 726 million, respectively.

(3)

Based on weighted average common units outstanding for the period, as well as weighted average Series A preferred units outstanding of 71 million for each of the periods presented.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

SELECTED FINANCIAL DATA BY SEGMENT

(in millions)

Three Months Ended
December 31, 2019

Three Months Ended
December 31, 2018

Transportation

Facilities

Supply and Logistics

Transportation

Facilities

Supply and Logistics

Revenues (1)

$

608

$

291

$

8,796

$

563

$

295

$

8,446

Purchases and related costs (1)

(89)

(5)

(8,677)

(54)

(5)

(7,411)

Field operating costs (1) (2)

(168)

(93)

(63)

(171)

(88)

(76)

Segment general and administrative expenses (2) (3)

(24)

(20)

(28)

(31)

(23)

(30)

Equity earnings in unconsolidated entities

115

—

—

93

—

—

Adjustments: (4)

Depreciation and amortization of unconsolidated entities

15

1

—

13

—

—

(Gains)/losses from derivative activities net of inventory valuation adjustments

—

1

218

—

2

(628)

Long-term inventory costing adjustments

—

—

(22)

—

—

38

Deficiencies under minimum volume commitments, net

(8)

—

—

2

(4)

—

Equity-indexed compensation expense

2

1

1

10

4

5

Net (gain)/loss on foreign currency revaluation

—

—

7

—

—

(2)

Segment Adjusted EBITDA

$

451

$

176

$

232

$

425

$

181

$

342

Maintenance capital

$

52

$

23

$

9

$

38

$

26

$

2

(1)

Includes intersegment amounts.

(2)

Field operating costs and Segment general and administrative expenses include equity-indexed compensation expense.

(3)

Segment general and administrative expenses reflect direct costs attributable to each segment and an allocation of other expenses to the segments. The proportional allocations by segment require judgment by management and are based on the business activities that exist during each period.

(4)

Represents adjustments utilized by our Chief Operating Decision Maker (“CODM”) in the evaluation of segment results. Many of these adjustments are also considered selected items impacting comparability when calculating consolidated non-GAAP financial measures such as Adjusted EBITDA. See the “Selected Items Impacting Comparability” table for additional discussion.

FINANCIAL SUMMARY (unaudited)

SELECTED FINANCIAL DATA BY SEGMENT

(in millions)

Twelve Months Ended
December 31, 2019

Twelve Months Ended
December 31, 2018

Transportation

Facilities

Supply and Logistics

Transportation

Facilities

Supply and Logistics

Revenues (1)

$

2,320

$

1,171

$

32,276

$

1,990

$

1,161

$

32,822

Purchases and related costs (1)

(244)

(15)

(31,276)

(194)

(17)

(31,487)

Field operating costs (1) (2)

(700)

(360)

(258)

(640)

(360)

(276)

Segment general and administrative expenses (2) (3)

(104)

(83)

(110)

(117)

(82)

(117)

Equity earnings in unconsolidated entities

388

—

—

375

—

—

Adjustments: (4)