SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)March 1, 2004
Plains All American Pipeline, L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE (State or other jurisdiction of incorporation or organization) |
1-14569 (Commission File Number) |
76-0582150 (I.R.S. Employer Identification No.) |
333 Clay Street, Suite 1600
Houston, Texas 77002
(713) 646-4100
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
On April 1, 2004, Plains All American Pipeline, L.P. ("PAA") acquired the North American crude oil and pipeline operations of Link Energy LLC. The total purchase price for the transaction was approximately $326 million, which included $268 million in cash and approximately $58 million of net liabilities assumed and acquisition related costs.
On March 1, 2004, PAA acquired the interests in certain entities owned by Shell Pipeline Company LP, which owned interests in the Capline Pipe Line System, the Capwood Pipe Line System and the Patoka Pipe Line System. The purchase price of approximately $158.5 million includes transaction and closing costs.
Certain financial statements, including the pro forma combined financial statements of PAA for the six months ended June 30, 2004 and for the year ended December 31, 2003 giving effect to both of the acquisitions described above, have not been publicly disclosed, and are attached to this Form 8-K as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PLAINS ALL AMERICAN PIPELINE, L.P. | |||
Date: August 6, 2004 |
By: |
Plains AAP, L.P., its general partner |
|
By: |
Plains All American GP LLC, its general partner |
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By: |
/s/ TINA L. VAL |
||
Name: | Tina L. Val | ||
Title: | Vice President of Accounting and Chief Accounting Officer |
99.1 | Unaudited Pro Forma Combined Financial Statements of Plains All American Pipeline, L.P. for the six months ended June 30, 2004 and for the year ended December 31, 2003. |
PLAINS ALL AMERICAN PIPELINE, L.P.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Plains All American Pipeline, L.P. ("PAA") is a publicly traded Delaware limited partnership engaged in interstate and intrastate crude oil transportation, and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products. The following unaudited pro forma financial statements are presented to give effect to the transactions described below:
The acquisition of the North American crude oil and pipeline operations of Link Energy LLC, ("Link Energy" and the "Link acquisition"). The acquisition price of approximately $326 million includes the assumption of liabilities and net working capital items and transaction and other acquisition costs. The acquisition closed and was effective on April 1, 2004 and has been accounted for using the purchase method of accounting.
The acquisition of Shell Pipeline Company LP's ("SPLC") interest in certain entities. The principal assets of the entities include interests in the Capline Pipe Line System, the Capwood Pipe Line System and the Patoka Pipe Line System (referred to in this report as "the SPLC acquisition"). The purchase price, including transaction and closing costs, was approximately $158.5 million. The acquisition closed and was effective on March 1, 2004. The acquisition has been accounted for using the purchase method of accounting.
The transactions described above are included in PAA's historical unaudited consolidated balance sheet as of June 30, 2004. Accordingly, a pro forma balance sheet is not presented. The unaudited pro forma statements of operations for the six months ended June 30, 2004 and the year ended December 31, 2003 are based upon the following:
The unaudited pro forma combined statements of operations are not necessarily indicative of the results of the actual or future operations that would have been achieved had the transactions occurred at the dates assumed (as noted below). The unaudited pro forma combined statements of operations should be read in conjunction with: i) the notes thereto; ii) the historical unaudited financial statements of PAA for the six months ended June 30, 2004; iii) the historical unaudited financial statements of Link Energy for the three months ended March 31, 2004; and iv) the audited financial statements of PAA for the year ended December 31, 2003, as well as those for Link Energy and the businesses acquired in the SPLC acquisition, for the same period.
The following unaudited pro forma combined statements of operations for the six months ended June 30, 2004 and the year ended December 31, 2003 have been prepared as if the transactions described above had taken place at the beginning of the period presented.
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2004
(in thousands, except per unit data)
|
Plains All American Historical |
Link Energy Historical |
SPLC Acquisition Historical |
Pro Forma Acquisition Adjustments |
Plains All American Pro Forma |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
REVENUES | $ | 8,936,379 | $ | 40,682 | $ | 7,416 | $ | (465 | )(a) | $ | 8,984,012 | ||||||
COSTS AND EXPENSES |
|||||||||||||||||
Purchases and related costs | 8,685,372 | 8,081 | | (465 | )(a) | 8,692,988 | |||||||||||
Field operating costs (excluding LTIP charge) |
96,851 |
20,725 |
2,023 |
|
119,599 |
||||||||||||
LTIP chargeoperations | 567 | | | | 567 | ||||||||||||
General and administrative expenses (excluding LTIP charge) | 35,081 | 18,514 | | | 53,595 | ||||||||||||
LTIP charge general and administrative | 3,661 | | | | 3,661 | ||||||||||||
Depreciation and amortization | 29,118 | 5,060 | 874 | (5,934 2,571 |
)(b) (c) |
31,689 | |||||||||||
Total costs and expenses | 8,850,650 | 52,380 | 2,897 | (3,828 | ) | 8,902,099 | |||||||||||
Other, net | | (20 | ) | | | (20 | ) | ||||||||||
Gains on sales of assets | | 730 | (e) | | | 730 | |||||||||||
OPERATING INCOME | 85,729 | (10,988 | ) | 4,519 | 3,363 | 82,623 | |||||||||||
OTHER INCOME/(EXPENSE) |
|||||||||||||||||
Interest expense | (19,499 | ) | (11,531 | ) | | (2,893 | )(d) | (33,923 | ) | ||||||||
Interest and other income (expense), net |
453 |
(24 |
) |
|
|
429 |
|||||||||||
Income from continuing operations before cumulative effect of change in accounting principle | 66,683 | (22,543 | ) | 4,519 | 470 | 49,129 | |||||||||||
Cumulative effect of change in accounting principle | (3,130 | ) | | | | (3,130 | ) | ||||||||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 63,553 | $ | (22,543 | ) | $ | 4,519 | $ | 470 | $ | 45,999 | ||||||
NET INCOME FROM CONTINUING OPERATIONSLIMITED PARTNERS | $ | 58,954 | $ | 41,751 | |||||||||||||
NET INCOME FROM CONTINUING OPERATIONSGENERAL PARTNER | $ | 4,599 | $ | 4,248 | |||||||||||||
BASIC AND DILUTED NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT | |||||||||||||||||
Income from continuing operations before cumulative effect of change in accounting principle | $ | 1.03 | $ | 0.75 | |||||||||||||
Cumulative effect of change in accounting principle | (0.05 | ) | (0.05 | ) | |||||||||||||
Net income from continuing operations | $ | 0.98 | $ | 0.70 | |||||||||||||
BASIC AND DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING | 59,985 | 59,985 | |||||||||||||||
See notes to unaudited pro forma combined financial statements
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Twelve Months Ended December 31, 2003
(in thousands, except per unit data)
|
|
Link Energy Historical |
|
|
|
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|
Successor Company |
Predecessor Company |
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|
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Plains All American Historical |
Ten Months Ended December 31, 2003 |
Two Months Ended February 28, 2003 |
SPLC Acquisition Historical |
Pro Forma Acquisition Adjustments |
Plains All American Pro Forma |
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REVENUES | $ | 12,589,849 | $ | 153,033 | $ | 31,635 | $ | 35,855 | $ | (2,828 | )(a) | $ | 12,807,544 | |||||||
COSTS AND EXPENSES |
||||||||||||||||||||
Purchases and related costs | 12,232,536 | 23,863 | 4,521 | | (2,828 | )(a) | 12,258,092 | |||||||||||||
Field operating costs (excluding LTIP charge) |
134,177 |
70,102 |
13,020 |
10,574 |
|
227,873 |
||||||||||||||
LTIP chargeoperations | 5,727 | | | | | 5,727 | ||||||||||||||
General and administrative expenses (excluding LTIP charge) | 49,969 | 45,959 | 6,846 | 1,275 | | 104,049 | ||||||||||||||
LTIP chargegeneral and administrative | 23,063 | | | | | 23,063 | ||||||||||||||
Depreciation and amortization | 46,821 | 17,161 | 4,642 | 5,264 | (27,067 11,607 |
)(b) (c) |
58,428 | |||||||||||||
Total costs and expenses | 12,492,293 | 157,085 | 29,029 | 17,113 | (18,288 | ) | 12,677,232 | |||||||||||||
Other, net | | 1,982 | 8 | | | 1,990 | ||||||||||||||
Gains on sales of assets | 648 | 11,885 | (e) | | | (11,700 | )(f) | 833 | ||||||||||||
OPERATING INCOME | 98,204 | 9,815 | 2,614 | 18,742 | 3,760 | 133,135 | ||||||||||||||
OTHER INCOME/(EXPENSE) |
||||||||||||||||||||
Interest expense | (35,226 | ) | (32,708 | ) | (5,645 | ) | | (13,206 | )(d) | (86,785 | ) | |||||||||
Interest and other income (expense), net |
(3,530 |
) |
192 |
156 |
|
|
(3,182 |
) |
||||||||||||
Income (Loss) from Continuing Operations Before Reorganization Items, Net Gain on Discharge of Debt and Fresh Start Adjustments | 59,448 | (22,701 | ) | (2,875 | ) | 18,742 | (9,446 | ) | 43,168 | |||||||||||
Reorganization Items |
|
|
(7,330 |
) |
|
|
(7,330 |
) |
||||||||||||
Net Gain on Discharge of Debt | | | 131,560 | | | 131,560 | ||||||||||||||
Fresh Start Adjustments | | | (56,771 | ) | | | (56,771 | ) | ||||||||||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 59,448 | $ | (22,701 | ) | $ | 64,584 | $ | 18,742 | $ | (9,446 | ) | $ | 110,627 | ||||||
NET INCOME FROM CONTINUING OPERATIONSLIMITED PARTNERS | $ | 53,473 | $ | 103,628 | ||||||||||||||||
NET INCOME FROM CONTINUING OPERATIONSGENERAL PARTNER | $ | 5,975 | $ | 6,999 | ||||||||||||||||
BASIC NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT | $ | 1.01 | $ | 1.96 | ||||||||||||||||
DILUTED NET INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT | $ | 1.00 | $ | 1.94 | ||||||||||||||||
BASIC WEIGHTED AVERAGE UNITS OUTSTANDING | 52,743 | 52,743 | ||||||||||||||||||
DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING | 53,400 | 53,400 | ||||||||||||||||||
See notes to unaudited pro forma combined financial statements
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Note 1Acquisitions
Link Acquisition
The Link acquisition presented in these pro forma statements has been accounted for using the purchase method of accounting and the purchase price has been allocated in accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations". The acquisition consists of the North American crude oil and pipeline operations of Link Energy. The purchase price of approximately $326 million includes cash paid of approximately $268 million and approximately $58 million of net liabilities assumed and acquisition related costs. The acquisition closed and was effective on April 1, 2004. The total purchase price and the related allocation are preliminary as we are in the process of evaluating certain estimates. The purchase price allocation is set forth in the table below (in millions):
Fair value of assets acquired: | |||||
Property and equipment | $ | 256.3 | |||
Inventory | 1.1 | ||||
Linefill | 48.4 | ||||
Inventory in third party assets | 15.1 | ||||
Goodwill | 5.0 | ||||
Other long term assets | 0.2 | ||||
Subtotal | 326.1 | ||||
Accounts receivable |
405.4 |
||||
Other current assets | 1.8 | ||||
Subtotal | 407.2 | ||||
Total assets acquired |
733.3 |
||||
Fair value of liabilities assumed: |
|||||
Accounts payable and accrued liabilities | (448.9 | ) | |||
Other current liabilities | (8.5 | ) | |||
Other long-term liabilities | (7.4 | ) | |||
Total liabilities assumed | (464.8 | ) | |||
Cash paid for acquisition |
$ |
268.5 |
(1) |
||
SPLC Acquisition
The SPLC acquisition presented in these pro forma statements has been accounted for using the purchase method of accounting and the purchase price has been allocated in accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations." The purchase consists of the acquisition of Shell Pipeline Company LP's ("SPLC") interest in certain entities. The principal assets of the entities include interests in certain businesses from Shell Pipeline Company, including its interests in the Capline Pipe Line System, the Capwood Pipe Line System and the Patoka Pipe Line System. The purchase price of approximately $158.5 million includes transaction and closing costs. The
acquisition closed and was effective on March 1, 2004. The purchase price allocation is as follows (in millions):
Crude oil pipelines and facilities | $ | 151.4 | |
Crude oil storage and terminal facilities | 5.7 | ||
Land | 1.3 | ||
Office equipment and other | 0.1 | ||
Total | $ | 158.5 | |
Note 2Pro Forma Adjustments
The pro forma adjustments are as follows: