Plains All American Pipeline, L.P. and Plains GP Holdings Report Third-Quarter 2017 Results and Update 2017 Full-Year Guidance

HOUSTON–(BUSINESS WIRE)–Plains All American Pipeline, L.P. (NYSE: PAA)
and Plains GP Holdings (NYSE: PAGP)
today reported third-quarter 2017 results.

“PAA reported third-quarter results that were slightly above guidance,”
stated Greg L. Armstrong, Chairman and CEO of Plains All American
Pipeline. “We are on track to execute our leverage reduction plan,
on-time and on-budget with our capital program and making progress on a
number of additional commercial initiatives. Additionally, due to
significant preparation, coordination and execution by our employees,
the recent hurricanes had minimal impact on our operations and financial
results and we were able to service our customers without interruption.
I want to publicly thank our employees and vendors for their commitment
and hard work in that regard and also for the actions they took to help
one another and our communities in the recovery efforts.”

Segment adjusted EBITDA for the third quarter and first nine months of
2017 and 2016 is presented below:

Third-quarter 2017 Transportation segment adjusted EBITDA increased by
18% over comparable 2016 results. This increase was primarily driven by
increased volumes on our Permian Basin systems, in addition to
contributions from our Eagle Ford JV system, which receives Permian
volumes from our Cactus pipeline.

Third-quarter 2017 Facilities segment adjusted EBITDA increased by 6%
versus comparable 2016 results. This increase was primarily driven by
higher fee-based revenues at certain of our NGL facilities, partially
offset by lower rail activity and the impact of an asset sale completed
in June 2017.

Overall negative Supply & Logistics results for both third-quarter
periods primarily relate to the seasonality of our NGL supply business.
Third-quarter 2017 Supply and Logistics segment adjusted EBITDA
decreased by $39 million relative to comparable 2016 results due to
continued competitive pressures, margin compression, and reduced
arbitrage opportunities.

The Partnership estimates an approximate $6 million third-quarter 2017
adjusted EBITDA aggregate impact due to lower volumes resulting from
operational downtime associated with Hurricane Harvey.

2017 Full-Year Guidance

The table below presents our full-year 2017 financial and operating
guidance:

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:

Conference Call

PAA and PAGP will hold a conference call at 9:00 a.m. CT on Tuesday,
November 7, 2017 to discuss the following items:

1. PAA’s third-quarter 2017 performance;
2. Financial and operating guidance for the full year of 2017;
3. Capitalization and liquidity; and
4. PAA 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=1165323&tp_key=ec99532516

Alternatively, the webcast can be accessed at www.plainsallamerican.com,
under the Investor Relations section of the website (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 the website within two hours after the end of the
call and will be accessible for a period of 365 days.

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 and gains or losses
on significant asset sales of unconsolidated entities) and 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 measurements 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 “Accounts payable and accrued 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, expansion projects and numerous
other factors. These types of variations are not 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; market distortions caused by producer 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);
maintenance of our credit rating and ability to receive open credit from
our suppliers and trade counterparties; 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, refined products and natural gas and resulting changes in pricing
conditions or transportation throughput requirements; the occurrence of
a natural disaster, catastrophe, terrorist attack (including
eco-terrorist attacks) or other event, including 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;
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 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 failure to consummate, or significant delay in
consummating, sales of assets or interests as a part of our strategic
divestiture program; 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 availability of, and our
ability to consummate, acquisition or combination opportunities; the
effectiveness of our risk management activities; 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; 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; factors affecting demand for
natural gas and natural gas storage services and rates; 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 and refined products, as well as in the storage of natural gas
and the processing, transportation, fractionation, storage and marketing
of natural gas liquids 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, natural gas and refined
products. 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 over 5 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.

Contacts

Plains All American Pipeline, L.P. and Plains GP Holdings
Roy
Lamoreaux, 866-809-1291
Vice President, Investor Relations &
Communications
or
Brett Magill, 866-809-1291
Manager,
Investor Relations

Read full story here