Plains All American Pipeline LP

11/05/2019 | Press release | Distributed by Public on 11/05/2019 16:08

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

Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP Holdings (NYSE: PAGP) today reported third-quarter 2019 results.

Highlights:

  • 3Q19: Delivered financial and operating results ahead of expectations
  • Full-year 2019: Increased guidance for 2019 Adjusted EBITDA and reduced guidance for 2019 capital expenditures
  • Executing accretive projects in a capital-efficient manner
  • Optimizing our existing systems and aligning with strategic partners throughout the industry value chain

'We reported solid third-quarter results and increased Adjusted EBITDA guidance for the full year,' stated Willie Chiang, Chief Executive Officer of Plains All American Pipeline. 'We ended the quarter with solid leverage metrics, more than $3 billion of committed liquidity and substantial distribution coverage. We remain focused on allocating capital in a disciplined manner. In the near-term we are positioned to grow our fee-based business in 2020 and complete multiple previously announced, highly contracted and capital efficient projects from late 2020 through 2021, which provide strong visibility for fee-based growth. Looking forward, we expect meaningful reductions in our growth capital program in 2021 and beyond as we prioritize further lowering our leverage and returning capital to investors.'

Plains All American Pipeline, L.P.

Summary Financial Information (unaudited)

(in millions, except per unit data)

Three Months Ended
September 30,

%

Nine Months Ended
September 30,

%

GAAP Results

2019

2018

Change

2019

2018

Change

Net income attributable to PAA

$

449

$

710

(37

)%

$

1,865

$

1,099

70

%

Diluted net income per common unit

$

0.55

$

0.87

(37

)%

$

2.28

$

1.30

75

%

Diluted weighted average common units outstanding (1)

800

799

-

%

800

728

10

%

Distribution per common unit declared for the period

$

0.36

$

0.30

20

%

_______________________________

(1)

For the three and nine months ended September 30, 2019 and the three months ended September 30, 2018, includes all potentially dilutive securities outstanding (our Series A preferred units and equity-indexed compensation awards) during the period. Our Series A preferred units were not dilutive for the nine months ended September 30, 2018. See the 'Computation of Basic and Diluted Net Income Per Common Unit' table attached hereto for additional information.

Three Months Ended
September 30,

%

Nine Months Ended
September 30,

%

Non-GAAP Results (1)

2019

2018

Change

2019

2018

Change

Adjusted net income attributable to PAA (2)

$

430

$

363

18

%

$

1,546

$

916

69

%

Diluted adjusted net income per common unit (2)

$

0.52

$

0.43

21

%

$

1.88

$

1.05

79

%

Adjusted EBITDA

$

731

$

636

15

%

$

2,377

$

1,735

37

%

Implied DCF per common unit

$

0.64

$

0.55

16

%

$

2.27

$

1.52

49

%

_______________________________

(1)

See the section of this release entitled 'Non-GAAP Financial Measures and Selected Items Impacting Comparability' and the tables attached hereto for information regarding certain selected items that PAA believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures (such as Adjusted EBITDA and Implied DCF) and their reconciliation to the most directly comparable measures as reported in accordance with GAAP.

(2)

During the fourth quarter of 2018, we began classifying net gains and losses on asset sales and asset impairments as a selected item impacting comparability in the calculation of adjusted net income. Prior period amounts have been recast to reflect this change. See the 'Selected Items Impacting Comparability' table attached hereto for additional information.

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

Summary of Selected Financial Data by Segment (unaudited)

(in millions)

Segment Adjusted EBITDA

Transportation

Facilities

Supply and
Logistics

Three Months Ended September 30, 2019

$

462

$

173

$

92

Three Months Ended September 30, 2018

$

388

$

173

$

75

Percentage change in Segment Adjusted EBITDA versus 2018 period

19

%

-

%

23

%

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

27

%

N/A

N/A

Segment Adjusted EBITDA

Transportation

Facilities

Supply and
Logistics

Nine Months Ended September 30, 2019

$

1,271

$

529

$

571

Nine Months Ended September 30, 2018

$

1,083

$

530

$

120

Percentage change in Segment Adjusted EBITDA versus 2018 period

17

%

-

%

**

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

25

%

-

%

N/A

________________________________

**

Indicates that variance as a percentage is not meaningful.

Third-quarter 2019 Transportation Segment Adjusted EBITDA increased by 19% over comparable 2018 results. This increase was primarily driven by increased volume on our Permian Basin systems, which includes start-up of the Sunrise II and Cactus II pipeline systems in the fourth quarter of 2018 and third quarter of 2019, respectively. These favorable results were partially offset by our sale of an interest in the BridgeTex pipeline at the end of the third quarter of 2018.

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

Third-quarter 2019 Supply and Logistics Segment Adjusted EBITDA increased versus comparable 2018 results primarily due to favorable crude oil differentials in the Permian Basin partially offset by lower NGL margins.

2019 Full-Year Guidance

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

Financial and Operating Guidance (unaudited)

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

Twelve Months Ended December 31,

2017

2018

2019 (G)

+ / -

Segment Adjusted EBITDA

Transportation

$

1,287

$

1,508

$

1,715

Facilities

734

711

685

Fee-Based

$

2,021

$

2,219

$

2,400

Supply and Logistics

60

462

670

Adjusted other income/(expense), net

1

3

5

Adjusted EBITDA (1)

$

2,082

$

2,684

$

3,075

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

(483

)

(419

)

(405

)

Maintenance capital

(247

)

(252

)

(265

)

Current income tax expense

(28

)

(66

)

(90

)

Other

(12

)

1

(45

)

Implied DCF (1)

$

1,312

$

1,948

$

2,270

Preferred unit distributions paid (3)

(5

)

(161

)

(200

)

Implied DCF Available to Common Unitholders

$

1,307

$

1,787

$

2,070

Implied DCF per Common Unit (1)

$

1.82

$

2.46

$

2.85

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

$

1.67

$

2.38

$

2.78

Distributions per Common Unit (4)

$

1.95

$

1.20

$

1.38

Common Unit Distribution Coverage Ratio

0.94

x

2.05

x

2.06

x

Diluted Adjusted Net Income per Common Unit (1)

$

1.10

$

1.88

$

2.35

Operating Data

Transportation

Average daily volumes (MBbls/d)

5,186

5,889

6,875

Segment Adjusted EBITDA per barrel

$

0.68

$

0.70

$

0.68

Facilities

Average capacity (MMBbls/Mo)

130

124

125

Segment Adjusted EBITDA per barrel

$

0.47

$

0.48

$

0.46

Supply and Logistics

Average daily volumes (MBbls/d)

1,219

1,309

1,325

Segment Adjusted EBITDA per barrel

$

0.13

$

0.97

$

1.39

Expansion Capital

$

1,135

$

1,888

$

1,350

Fourth-Quarter Adjusted EBITDA as Percentage of Full Year

30

%

35

%

23

%

________________________________

(G)

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

(1)

See the section of this release entitled 'Non-GAAP Financial Measures and Selected Items Impacting Comparability' and the Non-GAAP Reconciliation tables attached hereto for information regarding non-GAAP financial measures and, for the historical 2017 and 2018 periods, their reconciliation to the most directly comparable measures as reported in accordance with GAAP. We do not provide a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures on a forward-looking basis as it is impractical to forecast certain items that we have defined as 'Selected Items Impacting Comparability' without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of and the periods in which such items may be recognized. Thus, a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures could result in disclosure that could be imprecise or potentially misleading.

(2)

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

(3)

Cash distributions paid to our preferred unitholders during the year presented. Distributions on our Series A preferred units were paid-in-kind for all 2017 quarterly distributions and 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 semi-annually in arrears on May 15 and November 15. A pro-rated initial distribution on the Series B preferred units was paid on November 15, 2017.

(4)

Cash distributions per common unit paid during 2017 and 2018. 2019 (G) reflects the cash distribution per common unit paid in February and the increased annualized distribution rate of $1.44 per common unit for the remainder of the year.

Plains GP Holdings

PAGP owns an indirect non-economic controlling interest in PAA's general partner and an indirect limited partner interest in PAA. As the control entity of PAA, PAGP consolidates PAA's results into its financial statements, which is reflected in the condensed consolidating balance sheet and income statement tables included at the end of this release. Information regarding PAGP's distributions is reflected below:

Q3 2019

Q2 2019

Q3 2018

Distribution per Class A share declared for the period

$

0.36

$

0.36

$

0.30

Q3 2019 distribution percentage change from prior periods

-

%

20

%

Conference Call

PAA and PAGP will hold a joint conference call at 4:00 p.m. CT on Tuesday, November 5, 2019 to discuss the following items:

  1. PAA's third-quarter 2019 performance;
  2. Financial and operating guidance;
  3. Capitalization and liquidity; and
  4. PAA's and PAGP's outlook for the future.

Conference Call Webcast Instructions

To access the internet webcast, please go to https://event.webcasts.com/starthere.jsp?ei=1264489&tp_key=5224d72ff3.

Alternatively, the webcast can be accessed on our website (www.plainsallamerican.com) under Investor Relations (Navigate to: Investor Relations / either 'PAA' or 'PAGP' / News & Events / Quarterly Earnings). Following the live webcast, an audio replay in MP3 format will be available on our website within two hours after the end of the call and will be accessible for a period of 365 days. A transcript will also be available after the call at the above referenced website.

Non-GAAP Financial Measures and Selected Items Impacting Comparability

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

Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used to supplement related GAAP financial measures, (i) provide additional information about our core operating performance and ability to fund distributions to our unitholders through cash generated by our operations and (ii) provide investors with the same financial analytical framework upon which management bases financial, operational, compensation and planning/budgeting decisions. We also present these and additional non-GAAP financial measures, including adjusted net income attributable to PAA and basic and diluted adjusted net income per common unit, as they are measures that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations. These non-GAAP measures may exclude, for example, (i) charges for obligations that are expected to be settled with the issuance of equity instruments, (ii) gains or losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), the mark-to-market related to our Preferred Distribution Rate Reset Option, gains and losses on derivatives that are related to investing activities (such as the purchase of linefill) and inventory valuation adjustments, as applicable, (iii) long-term inventory costing adjustments, (iv) items that are not indicative of our core operating results and business outlook and/or (v) other items that we believe should be excluded in understanding our core operating performance. These measures may further be adjusted to include amounts related to deficiencies associated with minimum volume commitments whereby we have billed the counterparties for their deficiency obligation and such amounts are recognized as deferred revenue in 'Other current liabilities' on our Condensed Consolidated Financial Statements. Such amounts are presented net of applicable amounts subsequently recognized into revenue. Furthermore, the calculation of these measures contemplates tax effects as a separate reconciling item, where applicable. We have defined all such items as 'selected items impacting comparability.' Due to the nature of the selected items, certain selected items impacting comparability may impact certain non-GAAP financial measures, referred to as adjusted results, but not impact other non-GAAP financial measures. We do not necessarily consider all of our selected items impacting comparability to be non-recurring, infrequent or unusual, but we believe that an understanding of these selected items impacting comparability is material to the evaluation of our operating results and prospects.

Although we present selected items impacting comparability that management considers in evaluating our performance, you should also be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, exchange rates, mechanical interruptions, acquisitions, divestitures, expansion projects and numerous other factors. These types of variations may not be separately identified in this release, but will be discussed, as applicable, in management's discussion and analysis of operating results in our Quarterly Report on Form 10-Q.

Our definition and calculation of certain non-GAAP financial measures may not be comparable to similarly-titled measures of other companies. Adjusted EBITDA, Implied DCF and other non-GAAP financial performance measures are reconciled to Net Income (the most directly comparable measure as reported in accordance with GAAP) for the historical periods presented in the tables attached to this release, and should be viewed in addition to, and not in lieu of, our Condensed Consolidated Financial Statements and notes thereto. In addition, we encourage you to visit our website at www.plainsallamerican.com (in particular the section under 'Financial Information' entitled 'Non-GAAP Reconciliations' within the Investor Relations tab), which presents a reconciliation of our commonly used non-GAAP and supplemental financial measures.

Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this release consist of forward-looking statements that involve certain risks and uncertainties that could cause actual results or outcomes to differ materially from results or outcomes anticipated in the forward-looking statements. These risks and uncertainties include, among other things, declines in the actual or expected volume of crude oil and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of our assets, whether due to declines in production from existing oil and gas reserves, reduced demand, failure to develop or slowdown in the development of additional oil and gas reserves, whether from reduced cash flow to fund drilling or the inability to access capital, or other factors; the effects of competition, including the effects of capacity overbuild in areas where we operate; market distortions caused by over-commitments to infrastructure projects, which impacts volumes, margins, returns and overall earnings; unanticipated changes in crude oil and NGL market structure, grade differentials and volatility (or lack thereof); environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; fluctuations in refinery capacity in areas supplied by our mainlines and other factors affecting demand for various grades of crude oil, NGL and natural gas and resulting changes in pricing conditions or transportation throughput requirements; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; the occurrence of a natural disaster, catastrophe, terrorist attack (including eco-terrorist attacks) or other event, including cyber or other attacks on our electronic and computer systems; failure to implement or capitalize, or delays in implementing or capitalizing, on expansion projects, whether due to permitting delays, permitting withdrawals or other factors; shortages or cost increases of supplies, materials or labor; the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations; tightened capital markets or other factors that increase our cost of capital or limit our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness; the availability of, and our ability to consummate, acquisition or combination opportunities; the successful integration and future performance of acquired assets or businesses and the risks associated with operating in lines of business that are distinct and separate from our historical operations; the currency exchange rate of the Canadian dollar; continued creditworthiness of, and performance by, our counterparties, including financial institutions and trading companies with which we do business; inability to recognize current revenue attributable to deficiency payments received from customers who fail to ship or move more than minimum contracted volumes until the related credits expire or are used; non-utilization of our assets and facilities; increased costs, or lack of availability, of insurance; weather interference with business operations or project construction, including the impact of extreme weather events or conditions; the effectiveness of our risk management activities; fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our long-term incentive plans; risks related to the development and operation of our assets, including our ability to satisfy our contractual obligations to our customers; general economic, market or business conditions and the amplification of other risks caused by volatile financial markets, capital constraints and pervasive liquidity concerns; and other factors and uncertainties inherent in the transportation, storage, terminalling and marketing of crude oil, as well as in the storage of natural gas and the processing, transportation, fractionation, storage and marketing of NGL as discussed in the Partnerships' filings with the Securities and Exchange Commission.

Plains All American Pipeline, L.P. is a publicly traded master limited partnership that owns and operates midstream energy infrastructure and provides logistics services for crude oil, NGLs and natural gas. PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins and transportation corridors and at major market hubs in the United States and Canada. On average, PAA handles more than 6 million barrels per day of crude oil and NGL in its Transportation segment. PAA is headquartered in Houston, Texas. More information is available at www.plainsallamerican.com.

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

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per unit data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

REVENUES

$

7,886

$

8,792

$

24,515

$

25,269

COSTS AND EXPENSES

Purchases and related costs

6,855

7,768

21,218

22,838

Field operating costs

316

326

983

931

General and administrative expenses

74

74

225

232

Depreciation and amortization (1)

156

129

439

385

(Gains)/losses on asset sales and asset impairments, net (1)

(7

)

2

(7

)

(79

)

Total costs and expenses

7,394

8,299

22,858

24,307

OPERATING INCOME

492

493

1,657

962

OTHER INCOME/(EXPENSE)

Equity earnings in unconsolidated entities

102

110

274

281

Gain on investment in unconsolidated entities

4

210

271

210

Interest expense, net

(108

)

(110

)

(311

)

(327

)

Other income/(expense), net

5

(3

)

23

8

INCOME BEFORE TAX

495

700

1,914

1,134

Current income tax expense

(19

)

(14

)

(72

)

(34

)

Deferred income tax (expense)/benefit

(22

)

24

30

(1

)

NET INCOME

454

710

1,872

1,099

Net income attributable to noncontrolling interests

(5

)

-

(7

)

-

NET INCOME ATTRIBUTABLE TO PAA

$

449

$

710

$

1,865

$

1,099

NET INCOME PER COMMON UNIT:

Net income allocated to common unitholders - Basic

$

399

$

658

$

1,710

$

946

Basic weighted average common units outstanding

728

726

727

726

Basic net income per common unit

$

0.55

$

0.91

$

2.35

$

1.30

Net income allocated to common unitholders - Diluted

$

436

$

697

$

1,826

$

947

Diluted weighted average common units outstanding

800

799

800

728

Diluted net income per common unit

$

0.55

$

0.87

$

2.28

$

1.30

________________________________

(1)

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

NON-GAAP ADJUSTED RESULTS

(in millions, except per unit data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Adjusted net income attributable to PAA

$

430

$

363

$

1,546

$

916

Diluted adjusted net income per common unit

$

0.52

$

0.43

$

1.88

$

1.05

Adjusted EBITDA

$

731

$

636

$

2,377

$

1,735

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(in millions)

September 30,
2019

December 31,
2018

ASSETS

Current assets

$

4,676

$

3,533

Property and equipment, net

15,257

14,787

Goodwill

2,532

2,521

Investments in unconsolidated entities

3,485

2,702

Linefill and base gas

930

916

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

443

-

Long-term inventory

159

136

Other long-term assets, net

895

916

Total assets

$

28,377

$

25,511

LIABILITIES AND PARTNERS' CAPITAL

Current liabilities

$

4,872

$

3,456

Senior notes, net

8,937

8,941

Other long-term debt, net

236

202

Long-term operating lease liabilities

348

-

Other long-term liabilities and deferred credits

873

910

Total liabilities

15,266

13,509

Partners' capital excluding noncontrolling interests

12,978

12,002

Noncontrolling interests

133

-

Total partners' capital

13,111

12,002

Total liabilities and partners' capital

$

28,377

$

25,511

DEBT CAPITALIZATION RATIOS

(in millions)

September 30,
2019

December 31,
2018

Short-term debt

$

1,084

$

66

Long-term debt

9,173

9,143

Total debt

$

10,257

$

9,209

Long-term debt

$

9,173

$

9,143

Partners' capital

13,111

12,002

Total book capitalization

$

22,284

$

21,145

Total book capitalization, including short-term debt

$

23,368

$

21,211

Long-term debt-to-total book capitalization

41

%

43

%

Total debt-to-total book capitalization, including short-term debt

44

%

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
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Basic Net Income per Common Unit

Net income attributable to PAA

$

449

$

710

$

1,865

$

1,099

Distributions to Series A preferred unitholders

(37

)

(37

)

(112

)

(112

)

Distributions to Series B preferred unitholders

(12

)

(12

)

(37

)

(37

)

Other

(1

)

(3

)

(6

)

(4

)

Net income allocated to common unitholders

$

399

$

658

$

1,710

$

946

Basic weighted average common units outstanding

728

726

727

726

Basic net income per common unit

$

0.55

$

0.91

$

2.35

$

1.30

Diluted Net Income per Common Unit

Net income attributable to PAA

$

449

$

710

$

1,865

$

1,099

Distributions to Series A preferred unitholders

-

-

-

(112

)

Distributions to Series B preferred unitholders

(12

)

(12

)

(37

)

(37

)

Other

(1

)

(1

)

(2

)

(3

)

Net income allocated to common unitholders

$

436

$

697

$

1,826

$

947

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

800

799

800

728

Diluted net income per common unit

$

0.55

$

0.87

$

2.28

$

1.30

________________________________

(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 nine months ended September 30, 2018 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
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Selected Items Impacting Comparability: (1)

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

$

30

$

108

$

76

$

(104

)

Long-term inventory costing adjustments (3)

1

10

(3

)

18

Deficiencies under minimum volume commitments, net (4)

4

4

10

(9

)

Equity-indexed compensation expense (5)

(5

)

(14

)

(13

)

(37

)

Net gain/(loss) on foreign currency revaluation (6)

5

2

(6

)

(2

)

Line 901 incident (7)

-

-

(10

)

-

Selected items impacting comparability - Adjusted EBITDA

$

35

$

110

$

54

$

(134

)

Gains/(losses) from derivative activities (2)

-

-

(1

)

3

Gain on investment in unconsolidated entities

4

210

271

210

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

7

(2

)

7

79

Tax effect on selected items impacting comparability

(27

)

29

(12

)

25

Selected items impacting comparability - Adjusted net income attributable to PAA

$

19

$

347

$

319

$

183

________________________________

(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
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Basic Adjusted Net Income per Common Unit

Net income attributable to PAA

$

449

$

710

$

1,865

$

1,099

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

(19

)

(347

)

(319

)

(183

)

Adjusted net income attributable to PAA

$

430

$

363

$

1,546

$

916

Distributions to Series A preferred unitholders

(37

)

(37

)

(112

)

(112

)

Distributions to Series B preferred unitholders

(12

)

(12

)

(37

)

(37

)

Other

(1

)

(1

)

(4

)

(4

)

Adjusted net income allocated to common unitholders

$

380

$

313

$

1,393

$

763

Basic weighted average common units outstanding

728

726

727

726

Basic adjusted net income per common unit

$

0.52

$

0.43

$

1.92

$

1.05

Diluted Adjusted Net Income per Common Unit

Net income attributable to PAA

$

449

$

710

$

1,865

$

1,099

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

(19

)

(347

)

(319

)

(183

)

Adjusted net income attributable to PAA

$

430

$

363

$

1,546

$

916

Distributions to Series A preferred unitholders

(37

)

(37

)

-

(112

)

Distributions to Series B preferred unitholders

(12

)

(12

)

(37

)

(37

)

Other

(1

)

(1

)

(2

)

(3

)

Adjusted net income allocated to common unitholders

$

380

$

313

$

1,507

$

764

Basic weighted average common units outstanding

728

726

727

726

Effect of dilutive securities:

Series A preferred units (3)

-

-

71

-

Equity-indexed compensation plan awards (4)

1

2

2

2

Diluted weighted average common units outstanding

729

728

800

728

Diluted adjusted net income per common unit

$

0.52

$

0.43

$

1.88

$

1.05

________________________________

(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 three months ended September 30, 2019 and the three and nine months ended September 30, 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.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

NON-GAAP RECONCILIATIONS

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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Basic net income per common unit

$

0.55

$

0.91

$

2.35

$

1.30

Selected items impacting comparability per common unit (1)

(0.03

)

(0.48

)

(0.43

)

(0.25

)

Basic adjusted net income per common unit

$

0.52

$

0.43

$

1.92

$

1.05

Diluted net income per common unit

$

0.55

$

0.87

$

2.28

$

1.30

Selected items impacting comparability per common unit (1)

(0.03

)

(0.44

)

(0.40

)

(0.25

)

Diluted adjusted net income per common unit

$

0.52

$

0.43

$

1.88

$

1.05

________________________________

(1)

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

Twelve Months Ended
December 31,

2018

2017

Diluted net income per common unit

$

2.71

$

0.95

Selected items impacting comparability per common unit

(0.83

)

0.15

Diluted adjusted net income per common unit

$

1.88

$

1.10

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
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Net Income to Adjusted EBITDA and Implied DCF Reconciliation

Net Income

$

454

$

710

$

1,872

$

1,099

Interest expense, net

108

110

311

327

Income tax expense/(benefit)

41

(10

)

42

35

Depreciation and amortization

156

129

439

385

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

(7

)

2

(7

)

(79

)

Gain on investment in unconsolidated entities

(4

)

(210

)

(271

)

(210

)

Depreciation and amortization of unconsolidated entities (1)

18

15

45

44

Selected items impacting comparability - Adjusted EBITDA (2)

(35

)

(110

)

(54

)

134

Adjusted EBITDA

$

731

$

636

$

2,377

$

1,735

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

(104

)

(106

)

(298

)

(318

)

Maintenance capital

(85

)

(78

)

(204

)

(186

)

Current income tax expense

(19

)

(14

)

(72

)

(34

)

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

(13

)

(5

)

(12

)

9

Distributions to noncontrolling interests (5)

(4

)

-

(4

)

-

Implied DCF

$

506

$

433

$

1,787

$

1,206

Preferred unit distributions paid (6)

(37

)

(37

)

(137

)

(99

)

Implied DCF Available to Common Unitholders

$

469

$

396

$

1,650

$

1,107

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)

$

0.64

$

0.55

$

2.27

$

1.52

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

$

0.63

$

0.54

$

2.21

$

1.48

Cash Distribution Paid per Common Unit

$

0.36

$

0.30

$

1.02

$

0.90

Common Unit Cash Distributions (5)

$

262

$

218

$

741

$

653

Common Unit Distribution Coverage Ratio

1.79

x

1.82

x

2.23

x

1.70

x

Implied DCF Excess / (Shortage)

$

207

$

178

$

909

$

454

________________________________

(1)

Adjustment to add back our proportionate share of depreciation and amortization expense of, 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 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)

(in millions, except per unit and ratio data)

Twelve Months Ended
December 31,

2018

2017

Net Income to Adjusted EBITDA and Implied DCF Reconciliation

Net Income

$

2,216

$

858

Interest expense, net

431

510

Income tax expense

198

44

Depreciation and amortization

520

517

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

(114

)

109

Gain on investment in unconsolidated entities

(200

)

-

Depreciation and amortization of unconsolidated entities (1)

56

45

Selected items impacting comparability - Adjusted EBITDA

(423

)

(1

)

Adjusted EBITDA

$

2,684

$

2,082

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

(419

)

(483

)

Maintenance capital

(252

)

(247

)

Current income tax expense

(66

)

(28

)

Adjusted equity earnings in unconsolidated entities, net of distributions (3)

1

(10

)

Distributions to noncontrolling interests (4)

-

(2

)

Implied DCF

$

1,948

$

1,312

Preferred unit distributions paid (5)

(161

)

(5

)

Implied DCF Available to Common Unitholders

$

1,787

$

1,307

Weighted Average Common Units Outstanding

726

717

Weighted Average Common Units and Common Equivalent Units

797

784

Implied DCF per Common Unit (6)

$

2.46

$

1.82

Implied DCF per Common Unit and Common Equivalent Unit (7)

$

2.38

$

1.67

Cash Distribution Paid per Common Unit

$

1.20

$

1.95

Common Unit Cash Distributions (4)

$

871

$

1,386

Common Unit Distribution Coverage Ratio

2.05

x

0.94

x

Implied DCF Excess / (Shortage)

$

916

$

(79

)

________________________________

(1)

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

(2)

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

(3)

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).

(4)

Cash distributions paid during the period presented.

(5)

Cash distributions paid to our preferred unitholders during the period presented. The $0.5250 quarterly ($2.10 annualized) per unit distribution requirement of our Series A preferred units was paid-in-kind for each quarterly distribution through February 2018. Distributions on our Series A preferred units have been paid in cash since the May 2018 quarterly distribution. The $61.25 per unit annual distribution requirement of our Series B preferred units is payable semi-annually in arrears on May 15 and November 15. A pro-rated initial distribution on the Series B preferred units was paid on November 15, 2017.

(6)

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

(7)

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 period. 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 Reconciliations:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Basic net income per common unit

$

0.55

$

0.91

$

2.35

$

1.30

Reconciling items per common unit (1) (2)

0.09

(0.36

)

(0.08

)

0.22

Implied DCF per common unit

$

0.64

$

0.55

$

2.27

$

1.52

Basic net income per common unit

$

0.55

$

0.91

$

2.35

$

1.30

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

0.08

(0.37

)

(0.14

)

0.18

Implied DCF per common unit and common equivalent unit

$

0.63

$

0.54

$

2.21

$

1.48

Twelve Months Ended
December 31,

2018

2017

Basic net income per common unit

$

2.77

$

0.96

Reconciling items per common unit (1) (4)

(0.31

)

0.86

Implied DCF per common unit

$

2.46

$

1.82

Basic net income per common unit

$

2.77

$

0.96

Reconciling items per common unit and common equivalent unit (1) (5)

(0.39

)

0.71

Implied DCF per common unit and common equivalent unit

$

2.38

$

1.67

________________________________

(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.

(4)

Based on weighted average common units outstanding for the period of 726 million and 717 million, respectively.

(5)

Based on weighted average common units outstanding for the period, as well as weighted average Series A preferred units outstanding for the period of approximately 71 million and 67 million, respectively.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

SELECTED FINANCIAL DATA BY SEGMENT

(in millions)

Three Months Ended
September 30, 2019

Three Months Ended
September 30, 2018

Transportation

Facilities

Supply and
Logistics

Transportation

Facilities

Supply and
Logistics

Revenues (1)

$

597

$

291

$

7,542

$

498

$

289

$

8,483

Purchases and related costs (1)

(55

)

(3

)

(7,337

)

(49

)

(3

)

(8,191

)

Field operating costs (1) (2)

(172

)

(92

)

(56

)

(164

)

(95

)

(70

)

Segment general and administrative expenses (2) (3)

(26

)

(21

)

(27

)

(28

)

(18

)

(28

)

Equity earnings in unconsolidated entities

102

-

-

110

-

-

Adjustments: (4)

Depreciation and amortization of unconsolidated entities

18

-

-

15

-

-

Gains from derivative activities, net of inventory valuation adjustments

(1

)

(3

)

(25

)

-

-

(110

)

Long-term inventory costing adjustments

-

-

(1

)

-

-

(10

)

Deficiencies under minimum volume commitments, net

(4

)

-

-

(1

)

(3

)

-

Equity-indexed compensation expense

3

1

1

7

3

4

Net gain on foreign currency revaluation

-

-

(5

)

-

-

(3

)

Segment Adjusted EBITDA

$

462

$

173

$

92

$

388

$

173

$

75

Maintenance capital

$

42

$

28

$

15

$

41

$

33

$

4

________________________________

(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.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

SELECTED FINANCIAL DATA BY SEGMENT

(in millions)

Nine Months Ended
September 30, 2019

Nine Months Ended
September 30, 2018

Transportation

Facilities

Supply and
Logistics

Transportation

Facilities

Supply and
Logistics

Revenues (1)

$

1,712

$

880

$

23,480

$

1,427

$

866

$

24,376

Purchases and related costs (1)

(155

)

(10

)

(22,599

)

(141

)

(12

)

(24,076

)

Field operating costs (1) (2)

(532

)

(267

)

(195

)

(469

)

(271

)

(200

)

Segment general and administrative expenses (2) (3)

(80

)

(62

)

(83

)

(86

)

(59

)

(87

)

Equity earnings in unconsolidated entities

274

-

-

281

-

-

Adjustments: (4)

Depreciation and amortization of unconsolidated entities

45

-

-

44

-

-

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

1

(15

)

(46

)

(1

)

(2

)

110

Long-term inventory costing adjustments

-

-

3

-

-

(18

)

Deficiencies under minimum volume commitments, net

(10

)

-

-

8

1

-

Equity-indexed compensation expense

6

3

4

20

7

10

Net loss on foreign currency revaluation

-

-

7

-

-

5

Line 901 incident

10

-

-

-

-

-

Segment Adjusted EBITDA

$

1,271

$

529

$

571

$

1,083

$

530

$

120

Maintenance capital

$

110

$

74

$

20

$

102

$

74

$

10

________________________________

(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 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.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

OPERATING DATA BY SEGMENT(1)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Transportation segment (average daily volumes in thousands of barrels per day):

Tariff activities volumes

Crude oil pipelines (by region):

Permian Basin (2)

4,852

3,880

4,568

3,621

South Texas / Eagle Ford (2)

429

451

445

436

Central (2)

538

480

524

456

Gulf Coast

176

171

160

182

Rocky Mountain (2)

284

258

300

261

Western

212

184

196

180

Canada

316

322

319

312

Crude oil pipelines

6,807

5,746

6,512

5,448

NGL pipelines

193

174

195

173

Tariff activities total volumes

7,000

5,920

6,707

5,621

Trucking volumes

81

95

86

95

Transportation segment total volumes

7,081

6,015

6,793

5,716

Facilities segment (average monthly volumes):

Liquids storage (average monthly capacity in millions of barrels)

110

109

109

109

Natural gas storage (average monthly working capacity in billions of cubic feet)

63

65

63

66

NGL fractionation (average volumes in thousands of barrels per day)

140

115

145

128

Facilities segment total volumes (average monthly volumes in millions of barrels) (3)

125

123

124

124

Supply and Logistics segment (average daily volumes in thousands of barrels per day):

Crude oil lease gathering purchases

1,146

1,042

1,126

1,034

NGL sales

124

195

202

243

Supply and Logistics segment total volumes

1,270

1,237

1,328

1,277

________________________________

(1)

Average volumes are calculated as the total volumes (attributable to our interest) for the period divided by the number of days or months in the period.

(2)

Region includes volumes (attributable to our interest) from pipelines owned by unconsolidated entities.

(3)

Facilities segment total volumes is calculated as the sum of: (i) liquids storage capacity; (ii) natural gas storage working capacity divided by 6 to account for the 6:1 mcf of natural gas to crude Btu equivalent ratio and further divided by 1,000 to convert to monthly volumes in millions; and (iii) NGL fractionation volumes multiplied by the number of days in the period and divided by the number of months in the period.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

NON-GAAP SEGMENT RECONCILIATIONS

(in millions)

Fee-based Segment Adjusted EBITDA to Adjusted EBITDA Reconciliations:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Transportation Segment Adjusted EBITDA

$

462

$

388

$

1,271

$

1,083

Facilities Segment Adjusted EBITDA

173

173

529

530

Fee-based Segment Adjusted EBITDA

$

635

$

561

$

1,800

$

1,613

Supply and Logistics Segment Adjusted EBITDA

92

75

571

120

Adjusted other income/(expense), net (1)

4

-

6

2

Adjusted EBITDA (2)

$

731

$

636

$

2,377

$

1,735

Twelve Months Ended
December 31,

2018

2017

Transportation Segment Adjusted EBITDA

$

1,508

$

1,287

Facilities Segment Adjusted EBITDA

711

734

Fee-based Segment Adjusted EBITDA

$

2,219

$

2,021

Supply and Logistics Segment Adjusted EBITDA

462

60

Adjusted other income/(expense), net (3)

3

1

Adjusted EBITDA (2)

$

2,684

$

2,082

________________________________

(1)

Represents 'Other income/(expense), net' as reported on our Condensed Consolidated Statements of Operations, adjusted for selected items impacting comparability of $(1) million, $3 million, $(17) million and $(6) million for the three and nine months ended September 30, 2019 and 2018, respectively. See the 'Selected Items Impacting Comparability' table for additional information.

(2)

See the 'Net Income to Adjusted EBITDA and Implied DCF Reconciliation' table for reconciliation to Net Income.

(3)

Represents 'Other income/(expense), net' as reported on our Consolidated Statements of Operations, adjusted for selected items impacting comparability of $10 million and $32 million for the twelve months ended December 31, 2018 and 2017, respectively.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

NON-GAAP SEGMENT RECONCILIATIONS

(in millions)

Reconciliation of Segment Adjusted EBITDA to Segment Adjusted EBITDA further adjusted for impact of divested assets:

Three Months Ended
September 30, 2019

Three Months Ended
September 30, 2018

Transportation

Facilities

Supply and
Logistics

Transportation

Facilities

Supply and
Logistics

Segment Adjusted EBITDA

$

462

$

173

$

92

$

388

$

173

$

75

Impact of divested assets (1)

-

-

-

(24

)

-

-

Segment Adjusted EBITDA further adjusted for impact of divested assets

$

462

$

173

$

92

$

364

$

173

$

75

Nine Months Ended
September 30, 2019

Nine Months Ended
September 30, 2018

Transportation

Facilities

Supply and
Logistics

Transportation

Facilities

Supply and
Logistics

Segment Adjusted EBITDA

$

1,271

$

529

$

571

$

1,083

$

530

$

120

Impact of divested assets (1)

-

-

-

(66

)

(2

)

-

Segment Adjusted EBITDA further adjusted for impact of divested assets

$

1,271

$

529

$

571

$

1,017

$

528

$

120

________________________________

(1)

Estimated impact of divestitures completed during 2018, 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, as well as a natural gas processing facility that was previously reported in our Facilities segment.

PLAINS GP HOLDINGS AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in millions, except per share data)

Three Months Ended
September 30, 2019

Three Months Ended
September 30, 2018

PAA

Consolidating
Adjustments (1)

PAGP

PAA

Consolidating
Adjustments (1)

PAGP

REVENUES

$

7,886

$

-

$

7,886

$

8,792

$

-

$

8,792

COSTS AND EXPENSES

Purchases and related costs

6,855

-

6,855

7,768

-

7,768

Field operating costs

316

-

316

326

-

326

General and administrative expenses

74

1

75

74

1

75

Depreciation and amortization

156

1

157

129

-

129

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

(7

)

-

(7

)

2

-

2

Total costs and expenses

7,394

2

7,396

8,299

1

8,300

OPERATING INCOME

492

(2

)

490

493

(1

)

492

OTHER INCOME/(EXPENSE)

Equity earnings in unconsolidated entities

102

-

102

110

-

110

Gain on investment in unconsolidated entities

4

-

4

210

-

210

Interest expense, net

(108

)

-

(108

)

(110

)

-

(110

)

Other income/(expense), net

5

-

5

(3

)

-

(3

)

INCOME BEFORE TAX

495

(2

)

493

700

(1

)

699

Current income tax expense

(19

)

-

(19

)

(14

)

-

(14

)

Deferred income tax (expense)/benefit

(22

)

(21

)

(43

)

24

(33

)

(9

)

NET INCOME

454

(23

)

431

710

(34

)

676

Net income attributable to noncontrolling interests

(5

)

(356

)

(361

)

-

(565

)

(565

)

NET INCOME ATTRIBUTABLE TO PAGP

$

449

$

(379

)

$

70

$

710

$

(599

)

$

111

BASIC NET INCOME PER CLASS A SHARE

$

0.41

$

0.70

DILUTED NET INCOME PER CLASS A SHARE

$

0.41

$

0.70

BASIC WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

168

158

DILUTED WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

168

158

________________________________

(1)

Represents the aggregate consolidating adjustments necessary to produce consolidated financial statements for PAGP.

PLAINS GP HOLDINGS AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in millions, except per share data)

Nine Months Ended
September 30, 2019

Nine Months Ended
September 30, 2018

PAA

Consolidating
Adjustments (1)

PAGP

PAA

Consolidating
Adjustments (1)

PAGP

REVENUES

$

24,515

$

-

$

24,515

$

25,269

$

-

$

25,269

COSTS AND EXPENSES

Purchases and related costs

21,218

-

21,218

22,838

-

22,838

Field operating costs

983

-

983

931

-

931

General and administrative expenses

225

4

229

232

3

235

Depreciation and amortization

439

2

441

385

1

386

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

(7

)

-

(7

)

(79

)

-

(79

)

Total costs and expenses

22,858

6

22,864

24,307

4

24,311

OPERATING INCOME

1,657

(6

)

1,651

962

(4

)

958

OTHER INCOME/(EXPENSE)

Equity earnings in unconsolidated entities

274

-

274

281

-

281

Gain on investment in unconsolidated entities

271

-

271

210

-

210

Interest expense, net

(311

)

-

(311

)

(327

)

-

(327

)

Other income, net

23

-

23

8

-

8

INCOME BEFORE TAX

1,914

(6

)

1,908

1,134

(4

)

1,130

Current income tax expense

(72

)

-

(72

)

(34

)

-

(34

)

Deferred income tax (expense)/benefit

30

(95

)

(65

)

(1

)

(49

)

(50

)

NET INCOME

1,872

(101

)

1,771

1,099

(53

)

1,046

Net income attributable to noncontrolling interests

(7

)

(1,481

)

(1,488

)

-

(892

)

(892

)

NET INCOME ATTRIBUTABLE TO PAGP

$

1,865

$

(1,582

)

$

283

$

1,099

$

(945

)

$

154

BASIC NET INCOME PER CLASS A SHARE

$

1.73

$

0.98

DILUTED NET INCOME PER CLASS A SHARE

$

1.72

$

0.98

BASIC WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

163

157

DILUTED WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING

165

157

________________________________

(1)

Represents the aggregate consolidating adjustments necessary to produce consolidated financial statements for PAGP.

PLAINS GP HOLDINGS AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET DATA

(in millions)

September 30, 2019

December 31, 2018

PAA

Consolidating
Adjustments (1)

PAGP

PAA

Consolidating
Adjustments (1)

PAGP

ASSETS

Current assets

$

4,676

$

2

$

4,678

$

3,533

$

3

$

3,536

Property and equipment, net

15,257

12

15,269

14,787

15

14,802

Goodwill

2,532

-

2,532

2,521

-

2,521

Investments in unconsolidated entities

3,485

-

3,485

2,702

-

2,702

Deferred tax asset

-

1,301

1,301

-

1,304

1,304

Linefill and base gas

930

-

930

916

-

916

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

443

-

443

-

-

-

Long-term inventory

159

-

159

136

-

136

Other long-term assets, net

895

(2

)

893

916

(3

)

913

Total assets

$

28,377

$

1,313

$

29,690

$

25,511

$

1,319

$

26,830

LIABILITIES AND PARTNERS' CAPITAL

Current liabilities

$

4,872

$

1

$

4,873

$

3,456

$

2

$

3,458

Senior notes, net

8,937

-

8,937

8,941

-

8,941

Other long-term debt, net

236

-

236

202

-

202

Long-term operating lease liabilities

348

-

348

-

-

-

Other long-term liabilities and deferred credits

873

-

873

910

-

910

Total liabilities

$

15,266

$

1

$

15,267

$

13,509

$

2

$

13,511

Partners' capital excluding noncontrolling interests

12,978

(10,823

)

2,155

12,002

(10,156

)

1,846

Noncontrolling interests

133

12,135

12,268

-

11,473

11,473

Total partners' capital

13,111

1,312

14,423

12,002

1,317

13,319

Total liabilities and partners' capital

$

28,377

$

1,313

$

29,690

$

25,511

$

1,319

$

26,830

________________________________

(1)

Represents the aggregate consolidating adjustments necessary to produce consolidated financial statements for PAGP.

PLAINS GP HOLDINGS AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

COMPUTATION OF BASIC AND DILUTED NET INCOME PER CLASS A SHARE

(in millions, except per share data)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2019

2018

2019

2018

Basic Net Income per Class A Share

Net income attributable to PAGP

$

70

$

111

$

283

$

154

Basic weighted average Class A shares outstanding

168

158

163

157

Basic net income per Class A share

$

0.41

$

0.70

$

1.73

$

0.98

Diluted Net Income per Class A Share

Net income attributable to PAGP

$

70

$

111

$

283

$

154

Incremental net income attributable to PAGP resulting from assumed exchange of AAP Management Units

-

-

1

-

Net income attributable to PAGP including incremental net income from assumed exchange of AAP Management Units

$

70

$

111

$

284

$

154

Basic weighted average Class A shares outstanding

168

158

163

157

Dilutive shares resulting from assumed exchange of AAP Management Units

-

-

2

-

Diluted weighted average Class A shares outstanding

168

158

165

157

Diluted net income per Class A share (1)

$

0.41

$

0.70

$

1.72

$

0.98

________________________________

(1)

For the three and nine months ended September 30, 2019 and 2018, the possible exchange of any AAP units would have had an antidilutive effect on basic net income per Class A share. For the three months ended September 30, 2019 and the three and nine months ended September 30, 2018, the possible exchange of AAP Management units would not have had a dilutive effect on basic net income per Class A share. For the nine months ended September 30, 2019, the possible exchange of AAP Management Units would have had a dilutive effect on basic net income per Class A share.

View source version on businesswire.com: https://www.businesswire.com/news/home/20191105006185/en/

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

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