4 unchanged sentences
Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our DCP as of December 31, 2020, the end of the period covered by this report, and, based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our DCP is effective.
+Added: Index to Financial Statements
Internal Control over Financial Reporting
13 unchanged sentences
There was no information that was required to be disclosed in a report on Form 8-K during the fourth quarter of 2020 that has not previously been reported.
+Added: Index to Financial Statements
Directors and Executive Officers of Our General Partner and Corporate Governance
18 unchanged sentences
Managing Director, Alvarez and Marsal
−Removed: Everardo Goyanes (2)
−Removed: Founder, Ex Cathedra LLC
+Added: Kevin McCarthy (2)
+Added: Vice Chairman, Kayne Anderson Capital Advisors, L.P.
Managing Partner, EnCap Investments L.P.
3 unchanged sentences
Former Chairman and CEO, Burlington Resources Inc.
−Removed: Co-Chairman, Kayne Anderson Capital Advisors, L.P.
−Removed: Taft Symonds (2)
−Removed: Chairman, Symonds Investment Company, Inc.
Christopher M.
7 unchanged sentences
The information required by this item will be set forth in the Proxy Statement for our 2021 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2020, and is incorporated herein by reference thereto.
+Added: Index to Financial Statements
Certain Relationships and Related Transactions, and Director Independence
2 unchanged sentences
The information required by this item will be set forth in the Proxy Statement for our 2021 Annual Meeting, which will be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2020, and is incorporated herein by reference thereto.
+Added: Index to Financial Statements
Exhibits and Financial Statement Schedules
3 unchanged sentences
All schedules are omitted because they are either not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.
−Removed: 2.1* — Share Purchase Agreement dated December 1, 2011 by and among Amoco Canada International Holdings B.V.
−Removed: and Plains Midstream Canada ULC (the schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (incorporated by reference to Exhibit 2.1 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2011).
−Removed: 2.2 — Agreement and Plan of Merger dated as of October 21, 2013, by and among Plains All American Pipeline, L.P., PAA Acquisition Company LLC, PAA Natural Gas Storage, L.P.
−Removed: and PNGS GP LLC (incorporated by reference to Exhibit 2.1 to PAA’s Current Report on Form 8-K filed October 24, 2013).
2.1* — Simplification Agreement, dated as of July 11, 2016, by and among PAA GP Holdings LLC, Plains GP Holdings, L.P., Plains All American GP LLC, Plains AAP, L.P., PAA GP LLC and Plains All American Pipeline, L.P.
18 unchanged sentences
dated as of November 15, 2016 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed November 21, 2016).
+Added: Index to Financial Statements
+Added: 3.9 — Amendment No.
+Added: 1 dated April 6, 2020 to the Second Amended and Restated Agreement of Limited Partnership of Plains GP Holdings, L.P.
+Added: (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 9, 2020).
3.10 — Certificate of Formation of PAA GP Holdings LLC (incorporated by reference to Exhibit 3.3 to our Registration Statement on Form S-1 (333-190227) filed July 29, 2013).
11 unchanged sentences
Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to PAA’s Current Report on Form 8-K filed October 30, 2006).
−Removed: 4.4 — Nineteenth Supplemental Indenture (5.00% Senior Notes due 2021) dated January 14, 2011 among Plains All American Pipeline, L.P., PAA Finance Corp., the Subsidiary Guarantors named therein and U.S.
−Removed: Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed January 11, 2011).
4.4 — Twentieth Supplemental Indenture (3.65% Senior Notes due 2022) dated March 22, 2012 among Plains All American Pipeline, L.P., PAA Finance Corp.
12 unchanged sentences
Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed September 11, 2014).
+Added: Index to Financial Statements
4.11 — Twenty-Eighth Supplemental Indenture (4.90% Senior Notes due 2045) dated December 9, 2014, by and among Plains All American Pipeline, L.P., PAA Finance Corp.
6 unchanged sentences
Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA’s Current Report on Form 8-K filed September 17, 2019).
+Added: 4.15 — Thirty-Second Supplemental Indenture (3.80% Senior Notes due 2030) dated June 11, 2020, by and among Plains All American Pipeline, L.P., PAA Finance Corp.
+Added: Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to PAA ’ s Current Report on Form 8-K filed June 11, 2020).
4.16 — Shareholder and Registration Rights Agreement dated October 21, 2013 by and among Plains GP Holdings, L.P.
27 unchanged sentences
and the other Lenders and L/C Issuers party thereto (incorporated by reference to Exhibit 10.1 to PAA’s Current Report on Form 8-K filed July 3, 2012).
+Added: Index to Financial Statements
10.7 — Second Amendment to Third Amended and Restated Credit Agreement dated as of August 16, 2013, among Plains Marketing, L.P.
16 unchanged sentences
and the other Lenders and L/C Issuers party thereto (incorporated by reference to Exhibit 10.6 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017).
−Removed: 10.10 — Contribution, Conveyance and Assumption Agreement among Plains All American Pipeline, L.P.
−Removed: and certain other parties dated as of November 23, 1998.
−Removed: (incorporated by reference to Exhibit 10.3 to PAA’s Annual Report on Form 10-K for the year ended December 31, 1998).
−Removed: 10.11 — First Amendment to Contribution, Conveyance and Assumption Agreement dated as of December 15, 1998 (incorporated by reference to Exhibit 10.13 to PAA’s Annual Report on Form 10-K for the year ended December 31, 1998).
−Removed: 10.12 — Contribution, Assignment and Amendment Agreement dated as of June 27, 2001, among Plains All American Pipeline, L.P., Plains Marketing, L.P., All American Pipeline, L.P., Plains AAP, L.P., Plains All American GP LLC and Plains Marketing GP Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to PAA’s Current Report on Form 8-K filed June 27, 2001).
−Removed: 10.13 — Contribution, Assignment and Amendment Agreement dated as of June 8, 2001, among Plains All American Inc., Plains AAP, L.P.
−Removed: and Plains All American GP LLC (incorporated by reference to Exhibit 10.1 to PAA’s Current Report on Form 8-K filed June 11, 2001).
−Removed: 10.14 — Separation Agreement dated as of June 8, 2001 among Plains Resources Inc., Plains All American Inc., Plains All American GP LLC, Plains AAP, L.P.
−Removed: and Plains All American Pipeline, L.P.
−Removed: (incorporated by reference to Exhibit 10.2 to PAA’s Current Report on Form 8-K filed June 11, 2001).
−Removed: 10.15*** — Pension and Employee Benefits Assumption and Transition Agreement dated as of June 8, 2001 among Plains Resources Inc., Plains All American Inc.
−Removed: and Plains All American GP LLC (incorporated by reference to Exhibit 10.3 to PAA’s Current Report on Form 8-K filed June 11, 2001).
10.10 — Contribution and Assumption Agreement dated December 28, 2007, by and between Plains AAP, L.P.
and PAA GP LLC (incorporated by reference to Exhibit 10.2 to PAA’s Current Report on Form 8-K filed January 4, 2008).
−Removed: 10.17 — Asset Purchase and Sale Agreement dated February 28, 2001 between Murphy Oil Company Ltd.
−Removed: and Plains Marketing Canada, L.P.
−Removed: (incorporated by reference to Exhibit 99.1 to PAA’s Current Report on Form 8-K filed May 10, 2001).
−Removed: 10.18 — Transportation Agreement dated July 30, 1993, between All American Pipeline Company and Exxon Company, U.S.A.
−Removed: (incorporated by reference to Exhibit 10.9 to PAA’s Registration Statement on Form S-1 filed September 23, 1998, File No.
−Removed: 10.19 — Transportation Agreement dated August 2, 1993, among All American Pipeline Company, Texaco Trading and Transportation Inc., Chevron U.S.A.
−Removed: and Sun Operating Limited Partnership (incorporated by reference to Exhibit 10.10 to PAA’s Registration Statement on Form S-1 filed September 23, 1998, File No.
−Removed: 10.20 — Agreement for Purchase and Sale of Membership Interest in Scurlock Permian LLC between Marathon Ashland LLC and Plains Marketing, L.P.
−Removed: dated as of March 17, 1999 (incorporated by reference to Exhibit 10.16 to PAA’s Annual Report on Form 10-K for the year ended December 31, 1998).
−Removed: 10.21 — Membership Interest Purchase Agreement by and between Sempra Energy Trading Corporation and PAA/Vulcan Gas Storage, LLC dated August 19, 2005 (incorporated by reference to Exhibit 1.2 to PAA’s Current Report on Form 8-K filed September 19, 2005).
−Removed: 10.22 — Contribution Agreement dated as of April 29, 2010 by and among PAA Natural Gas Storage, L.P., PNGS GP LLC, Plains All American Pipeline, L.P., PAA Natural Gas Storage, LLC, PAA/Vulcan Gas Storage, LLC, Plains Marketing, L.P.
−Removed: and Plains Marketing GP Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to PNG’s Current Report on Form 8-K filed May 4, 2010).
−Removed: 10.23 — Omnibus Agreement dated May 5, 2010 by and among Plains All American GP LLC, Plains All American Pipeline, L.P., PNGS GP LLC and PAA Natural Gas Storage, L.P.
−Removed: (incorporated by reference to Exhibit 10.1 to PNG’s Current Report on Form 8-K filed May 11, 2010).
10.11 — Omnibus Agreement by and among PAA GP Holdings LLC, Plains GP Holdings, L.P., Plains All American GP LLC, Plains AAP, L.P., PAA GP LLC, and Plains All American Pipeline, L.P., dated November 15, 2016 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 21, 2016).
11 unchanged sentences
10.18** — Third Amended and Restated Employment Agreement dated effective January 1, 2020 between Plains All American GP LLC and Greg L.
+Added: Armstrong (in c orporated by reference to Exhibit 10.31 to our Annual Report on Form 10-K for the year ended December 31, 20 1 9 ).
10.19** — Amended and Restated Employment Agreement between Plains All American GP LLC and Harry N.
2 unchanged sentences
Pefanis (incorporated by reference to Exhibit 10.50 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2008).
+Added: Index to Financial Statements
10.21** — Amendment No.
10 unchanged sentences
Class B Restricted Units Agreement (Willie Chiang) (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018).
−Removed: 10.41*** — Amendment dated August 25, 2016 to LTIP Grant Letter dated August 24, 2015 (Willie Chiang)(incorporated by reference to Exhibit 10.7 to PAA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed November 8, 2016).
−Removed: 10.42*** — Amendment dated March 22, 2018 to PAA LTIP Grant Letter dated August 24, 2015 (Willie Chiang) (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018).
10.28** — LTIP Grant Letter dated August 16, 2018 (Willie Chiang) incorporated by reference to Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018).
−Removed: 10.44*** — Plains All American GP LLC 1998 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to PAA’s Registration Statement on Form S-8, File No.
−Removed: 10.45*** — First Amendment to Plains All American GP LLC 1998 Long-Term Incentive Plan dated June 27, 2003 (incorporated by reference to Exhibit 10.1 to PAA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
−Removed: 10.46*** — Second Amendment to Plains All American GP LLC 1998 Long-Term Incentive Plan dated December 4, 2008 (incorporated by reference to Exhibit 10.52 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2008).
−Removed: 10.47*** — Plains All American GP LLC 2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to PAA’s Current Report on Form 8-K filed January 26, 2005).
−Removed: 10.48*** — First Amendment to Plains All American GP LLC 2005 Long-Term Incentive Plan dated December 4, 2008 (incorporated by reference to Exhibit 10.51 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2008).
−Removed: 10.49*** — Plains All American PPX Successor Long-Term Incentive Plan (incorporated by reference to Exhibit 10.45 to PAA’s Annual Report on Form 10-K for the year ended December 31, 2006).
10.29** — Plains All American 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit A to PAA’s Definitive Proxy Statement filed on October 3, 2013).
14 unchanged sentences
10.38** — Form of Amendment dated March 22, 2018 to PAA LTIP Grant Letter dated August 25, 2016 (Officers) (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018).
−Removed: 10.60*** — Form of LTIP Grant Letter for Officers (July 2017) (incorporated by reference to Exhibit 10.4 to PAA’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017).
10.39** — Form of PAA LTIP Grant Letter for Officers (March 2018) (incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018).
+Added: Index to Financial Statements
10.40** — Form of Director LTIP Grant Letter (February 2017) - Director Grant - Designated Directors and Audit Committee Members (PAA Plan) (incorporated by reference to Exhibit 10.1 to PAA’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017).
7 unchanged sentences
10.48** — Form of LTIP Grant Letter dated August 15, 2019 (Officers) (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
+Added: 10.49** — Form of LTIP Grant Letter dated August 15, 2019 (Directors) (incorporated by reference to E xhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
+Added: 10.50** — Director LTIP Grant Letter (January 2020) (incorporated by reference to Exhibit 10.72 to our Annual Report on Form 10-K for the year ended December 3 1, 20 1 9).
+Added: 10.51** — Form of LTIP Grant Letter dated August 13, 2020 (Officers) (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020).
10.52** — Form of LTIP Grant Letter dated August 13, 2020 (Directors) (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020).
−Removed: 10.72***† — Director LTIP Grant Letter (January 2020)
10.53 — Contribution Agreement dated October 21, 2013, by and among Plains GP Holdings, L.P., PAA GP Holdings LLC and the other parties signatory thereto (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed October 25, 2013).
+Added: 10.54** † — Form of Special Retention LTIP Grant Letter dated November 20, 2019.
+Added: 10.55** † — Form of LTIP Grant Letter dated December 21, 2017 (Goebel).
+Added: 10.56** † — Form of LTIP Grant Letter dated May 1, 2018 (Chandler).
+Added: 10.57** † — Form of LTIP Grant Letter dated May 1, 2018 (Chandler).
21.1 † — List of Subsidiaries of Plains GP Holdings, L.P.
3 unchanged sentences
32.1 †† — Certification of Principal Executive Officer pursuant to 18 U.S.C.
+Added: Index to Financial Statements
32.2 †† — Certification of Principal Financial Officer pursuant to 18 U.S.C.
8 unchanged sentences
†† Furnished herewith.
−Removed: * Certain confidential portions of this exhibit have been omitted pursuant to an Application for Confidential Treatment under Rule 24b-2 under the Exchange Act.
−Removed: This exhibit, with the omitted language, has been filed separately with the Securities and Exchange Commission.
* Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
2 unchanged sentences
Form 10-K Summary
+Added: Index to Financial Statements
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
17 unchanged sentences
February 26, 2021
+Added: Index to Financial Statements
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
8 unchanged sentences
/s/ Victor Burk Director of PAA GP Holdings LLC February 26, 2021
−Removed: /s/ Everardo Goyanes Director of PAA GP Holdings LLC February 27, 2020
−Removed: Everardo Goyanes
+Added: /s/ Kevin McCarthy Director of PAA GP Holdings LLC February 26, 2021
+Added: Kevin McCarthy
Petersen Director of PAA GP Holdings LLC February 26, 2021
3 unchanged sentences
Shackouls Director of PAA GP Holdings LLC February 26, 2021
−Removed: /s/ Robert V.
−Removed: Sinnott Director of PAA GP Holdings LLC February 27, 2020
−Removed: Taft Symonds Director of PAA GP Holdings LLC February 27, 2020
/s/ Christopher M.
3 unchanged sentences
Ziemba Director of PAA GP Holdings LLC February 26, 2021
+Added: Index to Financial Statements
PLAINS GP HOLDINGS, L.P.
6 unchanged sentences
Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018
−Removed: Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
+Added: Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2020, 2019 and 2018
Consolidated Statements of Changes in Accumulated Other Comprehensive Income/(Loss) for the years ended December 31, 2020, 2019 and 2018
19 unchanged sentences
Operating Segments
+Added: Index to Financial Statements
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
18 unchanged sentences
February 26, 2021
+Added: Index to Financial Statements
Report of Independent Registered Public Accounting Firm
2 unchanged sentences
We have audited the accompanying consolidated balance sheets of Plains GP Holdings, L.P.
−Removed: and its subsidiaries (the “Partnership”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, of comprehensive income, of changes in accumulated other comprehensive income/(loss), of changes in partners’ capital and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”).
+Added: and its subsidiaries (the “Partnership”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income/(loss), of changes in accumulated other comprehensive income/(loss), of changes in partners' capital and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Partnership's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
19 unchanged sentences
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: Index to Financial Statements
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
3 unchanged sentences
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Goodwill Impairment Assessment — Facilities and Supply and Logistics Segments
−Removed: As described in Note 8 to the consolidated financial statements, the Partnership’s consolidated goodwill balance was $2,540 million as of December 31, 2019, which includes $1,488 million of goodwill related to the Facilities and Supply and Logistics segments.
−Removed: Goodwill is tested for impairment at a level of reporting referred to as a reporting unit.
+Added: Goodwill Impairment Assessment
+Added: As described in Note 8 to the consolidated financial statements, goodwill is tested for impairment at a level of reporting referred to as a reporting unit.
A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and regularly reviewed by segment management.
Management tests goodwill to determine whether an impairment has occurred at least annually (as of June 30) and on an interim basis if it is more likely than not that a reporting unit’s fair value is less than its carrying value.
−Removed: In the quantitative test, management compares the fair value of the reporting unit with the respective book values, including goodwill, by using an income approach based on a discounted cash flow analysis.
+Added: During the first quarter of 2020, the Partnership’s market capitalization declined significantly driven by macroeconomic and geopolitical conditions that occurred in 2020, including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions and expected lower crude oil production in certain regions, that resulted in expected decreases in future cash flows for certain assets, which was a triggering event that required management to perform a quantitative impairment test as of March 31, 2020.
+Added: As a result of this quantitative impairment test as of March 31, 2020, the Partnership recorded an impairment loss of $2,515 million and the consolidated goodwill balance was $0 as of December 31, 2020.
+Added: In the quantitative test, management compares the fair value of the reporting unit with the respective book values, including goodwill, by using an income approach based on a discounted cash flow model.
This approach requires management to make long-term forecasts of future revenues, expenses and other expenditures.
Those forecasts require the use of various assumptions and estimates, the most significant of which are net revenues (total revenues less purchases and related costs), operating expenses, general and administrative expenses and the weighted average cost of capital.
−Removed: Fair value of the reporting unit is determined using significant unobservable inputs, or Level 3 inputs in the fair value hierarchy.
−Removed: The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment – Facilities and Supply and Logistics segments is a critical audit matter are there was significant judgment by management when developing the fair value measurement of the reporting units.
−Removed: This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions for net revenues and the weighted average cost of capital.
−Removed: In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained from these procedures.
+Added: The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Partnership’s reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement of the reporting units;
+Added: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions relating to the weighted average cost of capital;
+Added: and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Partnership’s reporting units.
−Removed: These procedures also included, among others, testing management’s process for developing the fair value estimate;
−Removed: evaluating the appropriateness of the discounted cash flow models;
−Removed: testing the completeness, accuracy, and relevance of underlying data used in the models;
−Removed: and evaluating the reasonableness of significant assumptions used by management, including net revenues and the weighted average cost of capital.
−Removed: Evaluating management’s assumptions related to the forecast of net revenues involved evaluating whether the assumptions used were reasonable considering (i) the current and past performance of the reporting units;
−Removed: (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in the evaluation of the Partnership’s discounted cash flow models and certain significant assumptions, including the weighted average cost of capital.
−Removed: Fair Value of Investment in Capline LLC
−Removed: As described in Note 9 to the consolidated financial statements, during the first quarter of 2019, the owners of the Capline pipeline system contributed their undivided joint interests in the system for equity interests in a legal entity, Capline Pipeline Company LLC (“Capline LLC”).
−Removed: Although the Partnership owns a majority of Capline LLC’s equity, the Partnership does not have a controlling financial interest in Capline LLC because the other members have substantive participating rights.
−Removed: Therefore, management accounts for its ownership interest in Capline LLC as an equity method investment.
−Removed: The transaction resulted in a “loss of control” of the undivided joint interest, which was derecognized and contributed to Capline LLC.
−Removed: The loss of control required management to measure the equity investment in Capline LLC at fair value.
−Removed: At the time of the transaction, the Partnership’s 54% undivided joint interest in the Capline pipeline system had a carrying value of $175 million.
−Removed: Management determined the fair value of the investment in Capline LLC to be approximately $444 million, resulting in the recognition of a gain of $269 million during the year ended December 31, 2019.
−Removed: The fair value of the investment was determined using significant unobservable inputs, or Level 3 inputs in the fair value hierarchy.
−Removed: The fair value of the Partnership’s investment in Capline LLC was based on an income approach utilizing a discounted cash flow analysis.
−Removed: Those cash flow forecasts require the use of various assumptions and estimates, which include those related to the timing and amount of capital expenditures, expected tariff rates, volumes of crude oil, and the terminal value.
−Removed: Management probability-weighted various forecasted cash flow scenarios in the analysis to consider the possible outcomes and used a discount rate representing the estimate of the risk adjusted discount rate that would be used by market participants.
−Removed: The principal considerations for our determination that performing procedures relating to the fair value of the investment in Capline LLC is a critical audit matter are there was significant judgment by management when developing the fair value estimate of the equity investment.
−Removed: This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s fair value estimate of the investment in Capline LLC and significant assumptions, including expected tariff rates, volumes of crude oil, terminal value and the discount rate.
−Removed: In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained from these procedures.
+Added: These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of reporting units.
+Added: These procedures also included among others (i) testing management’s process for developing the fair value estimates;
+Added: (ii) evaluating the appropriateness of the discounted cash flow models;
+Added: (iii) testing the completeness and accuracy of underlying data used in the models;
+Added: and (iv) evaluating the reasonableness of the weighted average cost of capital assumptions used by management.
+Added: Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow models and evaluating the reasonableness of the weighted average cost of capital assumption.
+Added: Index to Financial Statements
+Added: Impairment Assessment of Certain Pipeline Assets in the Transportation Segment
+Added: As described in Note 6 to the consolidated financial statements, the Partnership’s consolidated net property, plant and equipment balance was $14,620 million as of December 31, 2020.
+Added: Management periodically evaluates property and equipment and other long-lived assets for impairment when events or circumstances indicate that the carrying value of these assets may not be recoverable.
+Added: The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.
+Added: If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss equal to the amount by which the carrying value exceeds the fair value of the asset is recognized.
+Added: The subjective assumptions used to determine the existence of an impairment in carrying value include whether there is an indication of impairment, the grouping of assets, the intention of “holding”, “abandoning” or “selling” an asset, the forecast of undiscounted expected future cash flow over the asset’s estimated useful life and, if an impairment exists, the fair value of the asset or asset group.
+Added: During the year ended December 31, 2020, the macroeconomic and geopolitical conditions, including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions and expected lower crude oil production in certain regions, resulted in expected decreases in future cash flows for certain assets, which was a triggering event that required management to assess the recoverability of the Partnership’s carrying value of such long-lived assets.
+Added: As a result, management recognized approximately $541 million of non-cash impairment losses of which approximately $415 million was associated with certain pipeline assets in the Transportation segment located in the Central region.
+Added: The evaluation is highly dependent on management’s key assumptions relating to the cash flows, including (i) future commodity volumes, (ii) tariff rates, (iii) future commodity prices, and (iv) estimated fixed and variable costs.
+Added: The principal considerations for our determination that performing procedures relating to the impairment assessment of certain pipeline assets included in the Transportation segment is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement of these assets due to the forecasted cash flows;
+Added: (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumption related to future commodity volumes;
+Added: and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s determination of the fair value of the Partnership’s investment in Capline LLC.
−Removed: These procedures also included, among others, testing management’s process for developing the fair value estimate of the investment in Capline LLC;
−Removed: evaluating the appropriateness of the discounted cash flow model;
−Removed: testing the completeness, accuracy and relevance of underlying data used in the model;
−Removed: and evaluating the reasonableness of significant assumptions, including expected tariff rates, volumes of crude oil, terminal value and discount rate.
−Removed: Evaluating management’s assumptions related to the forecasted volumes of crude oil and expected tariff rates involved evaluating whether the assumptions used were reasonable considering (i) relevant industry forecasts and macroeconomic conditions;
−Removed: (ii) consistency with external market and industry data;
+Added: These procedures included testing the effectiveness of controls relating to the impairment assessment of pipeline assets, including controls over management’s process to estimate fair value associated with certain pipeline assets included in the Transportation segment located in the Central region.
+Added: These procedures also included, among others (i) testing management’s process for developing the fair value of certain pipeline assets in the Transportation segment located in the Central region;
+Added: (ii) evaluating the appropriateness of the discounted cash flow models;
+Added: (iii) testing the completeness and accuracy of underlying data used in the models;
+Added: and (iv) evaluating the reasonableness of significant assumptions used by management related to future commodity volumes.
+Added: Evaluating management’s assumptions related to future commodity volumes involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the asset groups;
+Added: (ii) the consistency with external market and industry data;
and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in the evaluation of the Partnership’s discounted cash flow model and certain significant assumptions, including the terminal value and the discount rate.
+Added: Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the discounted cash flow models.
/s/ PricewaterhouseCoopers LLP
2 unchanged sentences
We have served as the Partnership’s auditor since 2013.
+Added: Index to Financial Statements
PLAINS GP HOLDINGS, L.P.
13 unchanged sentences
Property and equipment, net 14,620 15,367
−Removed: Goodwill 2,540 2,521
Investments in unconsolidated entities 3,764 3,683
+Added: Goodwill — 2,540
Deferred tax asset 1,444 1,280
23 unchanged sentences
The accompanying notes are an integral part of these consolidated financial statements.
+Added: Index to Financial Statements
PLAINS GP HOLDINGS, L.P.
13 unchanged sentences
Depreciation and amortization 656 604 521
−Removed: (Gains)/losses on asset sales and asset impairments, net 28 ( 114 ) 109
+Added: (Gains)/losses on asset sales and asset impairments, net (Note 6, Note 7) 719 28 ( 114 )
+Added: Goodwill impairment losses (Note 8) 2,515 — —
Total costs and expenses 25,673 31,689 31,783
−Removed: OPERATING INCOME 1,980 2,272 1,147
+Added: OPERATING INCOME/(LOSS) ( 2,383 ) 1,980 2,272
OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities 355 388 375
−Removed: Gain on investment in unconsolidated entities 271 200 —
+Added: Gain on/(impairment of) investments in unconsolidated entities, net (Note 9) ( 182 ) 271 200
Interest expense (net of capitalized interest of $ 24 , $ 34 and $ 30 , respectively)
1 unchanged sentence
Other income/(expense), net 39 24 ( 7 )
−Removed: INCOME BEFORE TAX 2,238 2,409 896
+Added: INCOME/(LOSS) BEFORE TAX ( 2,607 ) 2,238 2,409
Current income tax expense ( 51 ) ( 112 ) ( 66 )
−Removed: Deferred income tax expense ( 64 ) ( 236 ) ( 909 )
+Added: Deferred income tax (expense)/benefit 218 ( 64 ) ( 236 )
NET INCOME/(LOSS) ( 2,440 ) 2,062 2,107
−Removed: Net income attributable to noncontrolling interests ( 1,731 ) ( 1,773 ) ( 690 )
+Added: Net (income)/loss attributable to noncontrolling interests 1,872 ( 1,731 ) ( 1,773 )
NET INCOME/(LOSS) ATTRIBUTABLE TO PAGP $ ( 568 ) $ 331 $ 334
6 unchanged sentences
The accompanying notes are an integral part of these consolidated financial statements.
+Added: Index to Financial Statements
PLAINS GP HOLDINGS, L.P.
AND SUBSIDIARIES
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(in millions)
3 unchanged sentences
Other comprehensive income/(loss) 15 97 ( 260 )
−Removed: Comprehensive income 2,159 1,847 198
−Removed: Comprehensive income attributable to noncontrolling interests ( 1,805 ) ( 1,570 ) ( 881 )
+Added: Comprehensive income/(loss) ( 2,425 ) 2,159 1,847
+Added: Comprehensive (income)/loss attributable to noncontrolling interests 1,863 ( 1,805 ) ( 1,570 )
Comprehensive income/(loss) attributable to PAGP $ ( 562 ) $ 354 $ 277
9 unchanged sentences
Reclassification adjustments 8 — — 8
−Removed: Unrealized loss on hedges ( 16 ) — — ( 16 )
+Added: Unrealized gain on hedges 38 — — 38
Currency translation adjustments — ( 305 ) — ( 305 )
+Added: Other — — ( 1 ) ( 1 )
2018 Activity 46 ( 305 ) ( 1 ) ( 260 )
1 unchanged sentence
Reclassification adjustments 9 — — 9
−Removed: Unrealized gain on hedges 38 — — 38
+Added: Unrealized loss on hedges ( 91 ) — — ( 91 )
Currency translation adjustments — 179 — 179
−Removed: Other — — ( 1 ) ( 1 )
2019 Activity ( 82 ) 179 — 97
3 unchanged sentences
Currency translation adjustments — 17 — 17
+Added: Other — — ( 3 ) ( 3 )
2020 Activity 1 17 ( 3 ) 15
1 unchanged sentence
The accompanying notes are an integral part of these consolidated financial statements.
+Added: Index to Financial Statements
PLAINS GP HOLDINGS, L.P.
6 unchanged sentences
Net income/(loss) $ ( 2,440 ) $ 2,062 $ 2,107
−Removed: Reconciliation of net income to net cash provided by operating activities:
+Added: Reconciliation of net income/(loss) to net cash provided by operating activities:
Depreciation and amortization 656 604 521
−Removed: (Gains)/losses on asset sales and asset impairments, net 28 ( 114 ) 109
+Added: (Gains)/losses on asset sales and asset impairments, net (Note 6, Note 7) 719 28 ( 114 )
+Added: Goodwill impairment losses (Note 8) 2,515 — —
Equity-indexed compensation expense 16 35 79
4 unchanged sentences
Distributions on earnings from unconsolidated entities 472 401 422
−Removed: Gain on investment in unconsolidated entities ( 271 ) ( 200 ) —
+Added: (Gain on)/impairment of investments in unconsolidated entities, net (Note 9) 182 ( 271 ) ( 200 )
Other ( 12 ) 21 39
9 unchanged sentences
Proceeds from sales of assets (Note 7) 429 77 1,334
−Removed: Return of investment from unconsolidated entities (Note 9) — 10 21
−Removed: Cash received from sales of linefill and base gas — — 49
Cash paid for purchases of linefill and base gas ( 14 ) ( 74 ) ( 45 )
7 unchanged sentences
Repayments of PAA senior notes (Note 11) ( 617 ) ( 1,000 ) —
−Removed: Net proceeds from the sale of Class A shares (Note 12) — — 1,535
−Removed: Net proceeds from the sale of preferred units by a subsidiary (Note 12) — — 788
−Removed: Net proceeds from the sale of common units by a subsidiary (Note 12) — — 129
+Added: Repurchase of common units by a subsidiary (Note 12) ( 50 ) — —
Distributions paid to Class A shareholders (Note 12) ( 166 ) ( 231 ) ( 189 )
3 unchanged sentences
Net cash used in financing activities ( 430 ) ( 717 ) ( 1,753 )
−Removed: Effect of translation adjustment on cash ( 3 ) ( 9 ) 4
+Added: Effect of translation adjustment ( 8 ) ( 3 ) ( 9 )
Net increase/(decrease) in cash and cash equivalents and restricted cash ( 21 ) 15 29
5 unchanged sentences
The accompanying notes are an integral part of these consolidated financial statements.
+Added: Index to Financial Statements
PLAINS GP HOLDINGS, L.P.
4 unchanged sentences
Balance at December 31, 2017 $ 1,695 $ 10,663 $ 12,358
−Removed: Net income/(loss) ( 731 ) 690 ( 41 )
+Added: Impact of adoption of ASU 2017-05 24 89 113
+Added: Balance at January 1, 2018 1,719 10,752 12,471
+Added: Net income 334 1,773 2,107
Distributions (Note 12) ( 189 ) ( 880 ) ( 1,069 )
−Removed: ( 271 ) ( 1,128 ) ( 1,399 )
Deferred tax asset (Note 15) 22 — 22
−Removed: Sales of Class A shares (Note 12)
−Removed: 462 1,073 1,535
Change in ownership interest in connection with Exchange Right exercises (Note 12) 7 ( 7 ) —
−Removed: Sale of Series B preferred units by a subsidiary — 788 788
−Removed: Sales of common units by a subsidiary
−Removed: Issuance of common units by a subsidiary for acquisition of interest in Advantage Joint Venture (Note 7)
−Removed: Sale of interest in SLC Pipeline LLC by a subsidiary (Note 12) — ( 57 ) ( 57 )
−Removed: Other comprehensive income (Note 12)
+Added: Other comprehensive loss (Note 12) ( 57 ) ( 203 ) ( 260 )
Equity-indexed compensation expense 10 46 56
−Removed: 15 ( 23 ) ( 8 )
+Added: Other — ( 8 ) ( 8 )
Balance at December 31, 2018 $ 1,846 $ 11,473 $ 13,319
−Removed: Impact of adoption of ASU 2017-05 24 89 113
−Removed: Balance at January 1, 2018 1,719 10,752 12,471
Net income 331 1,731 2,062
Distributions (Note 12) ( 231 ) ( 977 ) ( 1,208 )
−Removed: ( 189 ) ( 880 ) ( 1,069 )
Deferred tax asset (Note 15) 86 — 86
Change in ownership interest in connection with Exchange Right exercises (Note 12) 101 ( 101 ) —
−Removed: Other comprehensive loss (Note 12) ( 57 ) ( 203 ) ( 260 )
+Added: Other comprehensive income (Note 12) 23 74 97
Equity-indexed compensation expense 5 13 18
−Removed: — ( 8 ) ( 8 )
+Added: Sale of noncontrolling interest in a subsidiary (Note 12) — 128 128
+Added: Other ( 6 ) ( 11 ) ( 17 )
Balance at December 31, 2019 $ 2,155 $ 12,330 $ 14,485
−Removed: 331 1,731 2,062
+Added: Net loss ( 568 ) ( 1,872 ) ( 2,440 )
Distributions (Note 12) ( 166 ) ( 697 ) ( 863 )
−Removed: ( 231 ) ( 977 ) ( 1,208 )
Deferred tax asset (Note 15) 16 — 16
Change in ownership interest in connection with Exchange Right exercises (Note 12) 10 ( 10 ) —
−Removed: 101 ( 101 ) —
Other comprehensive income (Note 12) 6 9 15
Equity-indexed compensation expense 6 14 20
−Removed: Sale of noncontrolling interest in a subsidiary (Note 12) — 128 128
−Removed: ( 6 ) ( 11 ) ( 17 )
+Added: Repurchase of common units by a subsidiary (Note 12) 4 ( 54 ) ( 50 )
+Added: Contributions from noncontrolling interests (Note 12) — 12 12
+Added: Other 1 ( 6 ) ( 5 )
Balance at December 31, 2020 $ 1,464 $ 9,726 $ 11,190
13 unchanged sentences
GP LLC is a Delaware limited liability company that also holds the non-economic general partner interest in AAP.
−Removed: AAP is a Delaware limited partnership that, as of December 31, 2019, directly owned a limited partner interest in PAA through its ownership of approximately 249.6 million PAA common units (approximately 31 % of PAA’s total outstanding common units and Series A preferred units combined (together, “PAA Common Unit Equivalents”)).
+Added: AAP is a Delaware limited partnership that, as of December 31, 2020, directly owned a limited partner interest in PAA through its ownership of approximately 245.8 million PAA common units (approximately 31 % of PAA’s total outstanding common units and Series A preferred units combined).
AAP is the sole member of PAA GP LLC (“PAA GP”), a Delaware limited liability company that directly holds the non-economic general partner interest in PAA.
−Removed: PAA is a publicly traded master limited partnership that owns and operates midstream energy infrastructure and provides logistics services primarily for crude oil, natural gas liquids (“NGL”) and natural gas.
−Removed: 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.
+Added: PAA is a publicly traded master limited partnership.
+Added: PAA’s business model integrates large-scale supply aggregation capabilities with the ownership and operation of critical midstream infrastructure systems that connect major producing regions to key demand centers and export terminals.
+Added: As one of the largest midstream service providers in North America, PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and natural gas liquids (“NGL”) producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada.
+Added: PAA’s assets and the services it provides are primarily focused on crude oil, NGL and natural gas.
Our business activities are conducted through three operating segments:
17 unchanged sentences
FASB = Financial Accounting Standards Board
−Removed: GAAP = Generally accepted accounting principles in the United States
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: GAAP = Generally accepted accounting principles in the United States
ICE = Intercontinental Exchange
9 unchanged sentences
TWh = Terawatt hour
+Added: = United States
USD = United States dollar
22 unchanged sentences
Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable.
+Added: During 2020, the novel coronavirus (“COVID-19”) pandemic resulted in a swift and material decline in global crude oil demand, which contributed to an oversupply of crude oil that was exacerbated by increases in production from certain suppliers in the global oil markets.
+Added: These macroeconomic and industry specific challenges resulted in a number of impairment charges recognized during 2020.
+Added: See Note 6, Note 8 and Note 9 for further discussion of these impairments.
+Added: Many uncertainties remain with respect to COVID-19, including uncertainty regarding the length of time the pandemic will continue, as well as the timing, pace and extent of an economic recovery in the United States, Canada and elsewhere, and how such uncertainties will impact the energy industry and our business.
+Added: As a result, these matters may affect our estimates and assumptions on amounts reported in the financial statements and accompanying notes in the near term.
Note 2— Summary of Significant Accounting Policies
2 unchanged sentences
Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period.
−Removed: We make significant estimates with respect to (i) estimated fair value of assets and liabilities acquired and identification of associated goodwill and intangible assets, (ii) impairment assessments of goodwill and intangible assets, (iii) fair value of derivatives, (iv) accruals and contingent liabilities, (v) equity-indexed compensation plan accruals, (vi) property and equipment, depreciation and amortization expense, asset retirement obligations and impairments, (vii) allowance for doubtful accounts and (viii) inventory valuations.
+Added: We make significant estimates with respect to (i) estimated fair value of assets and liabilities acquired and identification of associated goodwill and intangible assets, (ii) impairment assessments of goodwill and intangible assets, (iii) fair value of derivatives, (iv) accruals and contingent liabilities, (v) property and equipment, depreciation and amortization expense and asset retirement obligations, (vi) impairment assessments of property and equipment and investments in unconsolidated entities and (vii) inventory valuations.
Although we believe these estimates are reasonable, actual results could differ from these estimates.
Purchases and Related Costs
−Removed: Purchases and related costs include (i) the weighted average cost of crude oil, NGL and natural gas sold to customers, (ii) fees incurred for storage and transportation, whether by pipeline, truck, rail, ship or barge and (iii) performance-related bonus costs.
+Added: Purchases and related costs include (i) the weighted average cost of crude oil, NGL and natural gas sold to customers, (ii) fees incurred for storage and transportation, whether by pipeline, truck or rail and (iii) performance-related bonus costs.
These costs are recognized when incurred except in the case of products sold, which are recognized at the time title transfers to our customers.
15 unchanged sentences
and audit and tax fees.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Foreign Currency Transactions/Translation
5 unchanged sentences
However, gains and losses arising from intercompany foreign currency transactions that are of a long-term investment nature are reported in the same manner as translation adjustments.
−Removed: The revaluation of foreign currency transactions and monetary assets and liabilities resulted in amounts recorded to the Consolidated Statements of Operations of a net gain of $ 1 million in each of the years ended December 31, 2019 and 2018 and a net gain of $ 21 million for the year ended December 31, 2017.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: For the years ended December 31, 2020, 2019 and 2018, the revaluation of foreign currency transactions and monetary assets and liabilities resulted in the recognitions of net gains of $ 16 million, $ 1 million and $ 1 million, respectively, in our Consolidated Statements of Operations.
Cash and Cash Equivalents and Restricted Cash
4 unchanged sentences
Restricted cash includes cash held by us that is unavailable for general use and is comprised of amounts advanced to us by certain equity method investees related to the construction of fixed assets where we serve as construction manager.
−Removed: The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on our Consolidated Balance Sheet that sum to the total of the amount shown on our Consolidated Statement of Cash Flows as of December 31, 2019 (in millions):
−Removed: December 31, 2019
+Added: The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on our Consolidated Balance Sheets that sum to the total of the amount shown on our Consolidated Statements of Cash Flows (in millions):
Cash and cash equivalents $ 25 $ 47
1 unchanged sentence
Total cash and cash equivalents and restricted cash $ 63 $ 84
−Removed: We did not have any restricted cash as of December 31, 2018.
Noncontrolling Interests
5 unchanged sentences
FASB guidance also requires that the cost for asset retirement should be capitalized as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Some of our assets, primarily related to our Transportation and Facilities segments, have contractual or regulatory obligations to perform remediation and, in some instances, dismantlement and removal activities when the assets are abandoned.
5 unchanged sentences
We will record asset retirement obligations for these assets in the period in which sufficient information becomes available for us to reasonably determine the settlement dates.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A small portion of our contractual or regulatory obligations is related to assets that are inactive or that we plan to take out of service and, although the ultimate timing and costs to settle these obligations are not known with certainty, we have recorded a reasonable estimate of these obligations.
−Removed: The following table presents the change in the liability for asset retirement obligations, of which $ 135 million, $ 107 million and $ 99 million were reflected in “Other long-term liabilities and deferred credits” with the remaining portion reflected in “Other current liabilities” on our Consolidated Balance Sheets as of December 31, 2019, 2018 and 2017, respectively (in millions):
+Added: The following table presents the change in the liability for asset retirement obligations, substantially all of which is reflected in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets as of December 31, 2020, 2019 and 2018 (in millions):
2020 2019 2018
14 unchanged sentences
Other Significant Accounting Policies
−Removed: See the respective footnotes for our accounting policies regarding (i) revenues and accounts receivable, (ii) net income per Class A share, (iii) inventory, linefill and base gas and long-term inventory, (iv) property and equipment, (v) acquisitions, (vi) goodwill, (vii) investments in unconsolidated entities, (viii) other long-term assets, net, (ix) derivatives and risk management activities, (x) leases, (xi) income taxes, (xii) equity-indexed compensation and (xiii) legal and environmental matters.
+Added: See the respective footnotes for our accounting policies regarding (i) revenues and accounts receivable, (ii) net income/(loss) per Class A share, (iii) inventory, linefill and base gas and long-term inventory, (iv) property and equipment, (v) acquisitions, (vi) goodwill, (vii) investments in unconsolidated entities, (viii) other long-term assets, net, (ix) derivatives and risk management activities, (x) leases, (xi) income taxes, (xii) equity-indexed compensation and (xiii) legal and environmental matters.
Recent Accounting Pronouncements
−Removed: In December 2019, the FASB issued 2019-12, Income Taxes (Topic 740):
+Added: In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
+Added: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity, by eliminating two of the three models that require separate accounting for embedded conversion features and the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification.
+Added: This guidance is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted.
+Added: We are currently evaluating the effect that this guidance will have on our financial position, results of operations and cash flows.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):
+Added: Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.
+Added: This guidance is effective prospectively upon issuance through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of this ASU.
+Added: We will apply applicable expedients and exceptions to contract modifications through December 31, 2022.
+Added: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):
Simplifying the Accounting for Income Taxes , to simplify the accounting for income taxes based on changes suggested by stakeholders as part of the FASB’s simplification initiative.
This guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.
−Removed: We expect to adopt this guidance on January 1, 2021, and we are currently evaluating the effect that our adoption of this guidance will have on our financial position, results of operations and cash flows.
−Removed: In April 2019, the FASB issued 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , which clarifies certain aspects of accounting for credit losses, hedging activities and financial instruments.
We will adopt this guidance effective January 1, 2021, and do not anticipate that the adoption will have a material impact on our financial position, results of operations or cash flows.
+Added: In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , which clarifies certain aspects of accounting for credit losses, hedging activities and financial instruments.
+Added: We adopted this guidance effective January 1, 2020, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810):
1 unchanged sentence
This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.
−Removed: We will adopt this guidance effective January 1, 2020, and do not anticipate that the adoption will have a material impact on our financial position, results of operations or cash flows.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815):
−Removed: Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, to include the OIS rate based on SOFR as an eligible benchmark interest rate during the early stages of the marketplace transition to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes .
−Removed: This guidance is effective for interim and annual periods beginning after December 15, 2018, and must be adopted concurrently with the amendments in ASU 2017-12 (see below).
We adopted this guidance effective January 1, 2020, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
2 unchanged sentences
This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.
−Removed: We will adopt this guidance effective January 1, 2020, and do not anticipate that the adoption will have a material impact on our financial position, results of operations or cash flows.
+Added: We adopted this guidance effective January 1, 2020, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):
1 unchanged sentence
This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted.
−Removed: We will adopt this guidance effective January 1, 2020, and will apply the new guidance to any applicable disclosures.
−Removed: In July 2018, the FASB issued ASU 2018-09, Codification Improvements, which makes updates for clarifications, technical corrections and other minor improvements to a wide variety of Topics to make the ASC easier to understand and to apply.
−Removed: The transition and effective date is based on the facts and circumstances of each amendment with some amendments effective upon issuance.
−Removed: The remaining amendments are effective for annual periods beginning after December 15, 2018.
We adopted this guidance effective January 1, 2020, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
−Removed: In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718):
−Removed: Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment awards to nonemployees and eliminates the classification differences for employee and nonemployee share-based payment awards.
−Removed: This guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.
−Removed: We adopted this guidance effective January 1, 2019, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
−Removed: In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815):
−Removed: Targeted Improvements to Accounting for Hedging Activities, to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.
−Removed: Under the new guidance, (i) more financial and nonfinancial hedging strategies will be eligible for hedge accounting, (ii) presentation and disclosure requirements are amended and (iii) companies will change the way they assess effectiveness.
−Removed: This guidance is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.
−Removed: We adopted this guidance effective January 1, 2019, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments (followed by a series of related accounting standard updates), which amends guidance on the impairment of financial instruments and adds an impairment model (known as the current expected credit loss (or CECL) model) that is based on expected losses rather than incurred losses.
−Removed: This guidance will become effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted by one year.
−Removed: We will adopt this guidance effective January 1, 2020, and do not anticipate that the adoption will have a material impact on our financial position, results of operations or cash flows.
−Removed: In February 2016, the FASB issued ASU 2016-02, Leases , (followed by a series of related accounting standard updates (collectively referred to as “Topic 842”)), that revises the current accounting model for leases.
−Removed: The most significant changes are
+Added: This guidance became effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted by one year.
+Added: We adopted this guidance effective January 1, 2020, and our adoption did not have a material impact on our financial position, results of operations or cash flows.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: the clarification of the definition of a lease and required lessee recognition on the balance sheet of right-of-use assets and lease liabilities with lease terms of more than 12 months (with the election of the practical expedient to exclude short-term leases on the balance sheet), including extensive quantitative and qualitative disclosures.
−Removed: This guidance became effective for interim and annual periods beginning after December 15, 2018.
−Removed: We adopted this guidance effective January 1, 2019.
−Removed: Our adoption resulted in the recording of additional net lease right-of-use assets and lease liabilities of approximately $ 560 million and $ 570 million, respectively, on January 1, 2019, and did not have a material impact on our results of operations or cash flows.
−Removed: We elected the package of practical expedients permitted under the transition guidance within Topic 842, which, among other things, allowed us to carry forward the historical accounting related to lease identification, classification and indirect costs.
−Removed: We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements (including rights of way) on existing agreements.
−Removed: Additionally, we elected the non-lease component separation practical expedient for certain classes of assets where we are the lessee and for all classes where we are the lessor.
−Removed: Further, we elected the practical expedient which provides us with an optional transitional method, thereby applying the new guidance at the effective date, without adjusting the comparative periods and, if necessary, recognizing a cumulative-effect adjustment to the opening balance of Partners’ Capital upon adoption.
−Removed: There was no impact to retained earnings related to our adoption.
−Removed: We did not elect the practical expedient related to using hindsight in determining the lease term as this was not relevant following our election of the optional transitional method.
−Removed: We implemented a process to evaluate the impact of adopting this guidance on each type of lease contract we have entered into with counterparties.
−Removed: Our implementation team determined appropriate changes to our business processes, systems and controls to support recognition and disclosure under Topic 842.
−Removed: In addition to the above, which primarily relates to our accounting as a lessee, our accounting from a lessor perspective remains substantially unchanged under Topic 842.
−Removed: See Note 14 for information about our leases.
Note 3— Revenues and Accounts Receivable
Revenue Recognition
−Removed: On January 1, 2018, we adopted Revenues from Contracts with Customers (“Topic 606”) using the modified retrospective approach applied to those contracts which were not completed as of January 1, 2018.
−Removed: Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605, Revenue Recognition .
−Removed: Under Topic 606, we disaggregate our revenues by segment and type of activity.
+Added: We disaggregate our revenues by segment and type of activity.
These categories depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors.
2 unchanged sentences
Year Ended December 31,
+Added: 2020 2019 2018
Supply and Logistics segment revenues from contracts with customers
10 unchanged sentences
The inventory that has been sold under these crude oil sales agreements is reflected in “Other current assets” on our Consolidated Balance Sheet until all of our performance obligations are complete.
−Removed: At that time,
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: the inventory that has been sold is removed from our Consolidated Balance Sheet and recorded as “Purchases and related costs” in our Consolidated Statement of Operations.
−Removed: At December 31, 2019, other current assets and deferred revenue associated with these agreements were approximately $ 142 million and $ 155 million, respectively.
−Removed: At December 31, 2018, other current assets and deferred revenue associated with these agreements was approximately $ 115 million and $ 116 million, respectively.
+Added: At that time, the inventory that has been sold is removed from our Consolidated Balance Sheet and recorded as “Purchases and related costs” in our Consolidated Statement of Operations.
See “ Contract Balances ” below for further discussion of contract liabilities associated with these agreements.
+Added: The following table presents amounts in Other current assets and deferred revenue associated with these agreements (in millions):
+Added: Other current assets $ 229 $ 142
+Added: Deferred revenue (1)
+Added: (1) Included in “Other current liabilities” on our Consolidated Balance Sheet.
We may also utilize derivatives in connection with the transactions described above.
1 unchanged sentence
The change in the fair value of derivatives that are not designated or do not qualify for hedge accounting is recognized in revenues each period.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Transportation Segment Revenues from Contracts with Customers.
1 unchanged sentence
Year Ended December 31,
+Added: 2020 2019 2018
Transportation segment revenues from contracts with customers
5 unchanged sentences
Total Transportation segment revenues from contracts with customers $ 2,005 $ 2,283 $ 1,976
−Removed: Our Transportation segment operations generally consist of fee-based activities associated with transporting crude oil and NGL on pipelines, gathering systems and trucks.
+Added: Our Transportation segment operations generally consist of fee-based activities associated with transporting crude oil and NGL on pipelines and trucks.
Revenues from pipeline tariffs and fees are associated with the transportation of crude oil and NGL at a published tariff.
5 unchanged sentences
Year Ended December 31,
+Added: 2020 2019 2018
Facilities segment revenues from contracts with customers
7 unchanged sentences
Storage fees are typically recognized in revenue ratably over the term of the contract regardless of the actual storage capacity utilized as our performance obligation is to make available storage capacity for a period of time.
−Removed: Terminal fees
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (including throughput and rail fees) are recognized as the liquids enter or exit the terminal and are received from or delivered to the connecting carrier or third-party terminal, as applicable.
+Added: Terminal fees (including throughput and rail fees) are recognized as the liquids enter or exit the terminal and are received from or delivered to the connecting carrier or third-party terminal, as applicable.
Fees from NGL fractionation and isomerization services and gas processing services are recognized in the period when the services are performed.
1 unchanged sentence
We recognize rail loading and unloading fees when the volumes are delivered or received.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation to Total Revenues of Reportable Segments.
−Removed: Topic 606 requires us to provide information about the relationship between the disaggregated revenues presented above and segment revenues.
−Removed: These disclosures only include information regarding revenues associated with consolidated entities, and revenues from entities accounted for by the equity method are not included in the disclosures.
+Added: The following disclosures only include information regarding revenues associated with consolidated entities, and revenues from entities accounted for by the equity method are not included in the disclosures.
The following tables present the reconciliation of our revenues from contracts with customers (as described above for each segment) to segment revenues and total revenues as disclosed in our Consolidated Statements of Operations (in millions):
12 unchanged sentences
Total revenues $ 33,669
+Added: Year Ended December 31, 2018 Transportation Facilities Supply and
+Added: Logistics Total
+Added: Revenues from contracts with customers $ 1,976 $ 1,136 $ 32,700 $ 35,812
+Added: Other items in revenues 14 25 122 161
+Added: Total revenues of reportable segments $ 1,990 $ 1,161 $ 32,822 $ 35,973
+Added: Intersegment revenues ( 1,918 )
+Added: Total revenues $ 34,055
Minimum Volume Commitments.
3 unchanged sentences
If a counterparty has a make-up right associated with a deficiency, we defer the revenue attributable to the counterparty’s make-up right as a contract liability 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.
−Removed: At December 31, 2019 and December 31, 2018, counterparty deficiencies associated with contracts with customers and buy/sell arrangements that include minimum volume commitments totaled $ 42 million and $ 62 million, respectively, of which $ 22 million and $ 40 million, respectively, was recorded as a contract liability.
−Removed: The remaining balance of $ 20 million and $ 22 million at December 31, 2019 and December 31, 2018, respectively, was related to deficiencies for which the counterparties had not met their contractual minimum commitments and were not reflected in our Consolidated Financial Statements as we had not yet billed or collected such amounts.
−Removed: Contract Balances .
−Removed: Our contract balances consist of amounts received associated with services or sales for which we have not yet completed the related performance obligation.
−Removed: The following table presents the changes in the contract liability balance (in millions):
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: The following table presents counterparty deficiencies associated with contracts with customers and buy/sell arrangements that include minimum volume commitments for which we had remaining performance obligations and the customers still had the ability to meet their obligations (in millions):
+Added: Counterparty deficiencies Financial Statement Classification 2020 2019
+Added: Billed and collected Liability $ 73 $ 22
+Added: Total $ 77 $ 42
+Added: (1) Amounts were related to deficiencies for which the counterparties had not met their contractual minimum commitments and are not reflected in our Consolidated Financial Statements as we had not yet billed or collected such amounts.
+Added: Contract Balances .
+Added: Our contract balances consist of amounts received associated with services or sales for which we have not yet completed the related performance obligation.
+Added: The following table presents the changes in the liability balance associated with contracts with customers (in millions):
Contract Liabilities
8 unchanged sentences
Such amount was recognized as revenue in the first quarter of 2020.
−Removed: (2) Includes $ 100 million associated with long-term capacity agreements with Cactus II Pipeline LLC.
−Removed: See Note 9 for additional information.
−Removed: (3) Includes approximately $ 155 million associated with crude oil sales agreements that are entered into in conjunction with storage arrangements and future inventory exchanges.
+Added: (2) Includes approximately $ 361 million, as discussed above, associated with crude oil sales agreements that are entered into in conjunction with storage arrangements and future inventory exchanges.
Such amount is expected to be recognized as revenue in the first quarter of 2021.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Remaining Performance Obligations .
−Removed: Topic 606 requires a presentation of information about partially and wholly unsatisfied performance obligations under contracts that exist as of the end of the period.
−Removed: The information includes the amount of consideration allocated to those remaining performance obligations and the timing of revenue recognition of those remaining performance obligations.
+Added: The information below includes the amount of consideration allocated to partially and wholly unsatisfied performance obligations under contracts that exist as of the end of the periods and the timing of revenue recognition of those remaining performance obligations.
Certain contracts meet the requirements for the presentation as remaining performance obligations.
These arrangements include a fixed minimum level of service, typically a set volume of service, and do not contain any variability other than expected timing within a limited range.
−Removed: These contracts are all within the scope of Topic 606.
The following table presents the amount of consideration associated with remaining performance obligations for the population of contracts with external customers meeting the presentation requirements as of December 31, 2020 (in millions):
3 unchanged sentences
Storage, terminalling and throughput agreement revenues 340 273 206 173 114 328
−Removed: 404 312 242 188 147 366
Total $ 514 $ 439 $ 376 $ 315 $ 239 $ 783
(1) Calculated as volumes committed under contracts multiplied by the current applicable tariff rate.
−Removed: The presentation above does not include (i) expected revenues from legacy shippers not underpinned by minimum volume commitments, including pipelines where there are no or limited alternative pipeline transportation options, (ii) intersegment revenues and (iii) the amount of consideration associated with certain income generating contracts, which include a fixed minimum level of service, that are either not within the scope of Topic 606 or do not meet the requirements for presentation as remaining performance obligations under Topic 606.
−Removed: The following are examples of contracts that are not included in the table above because they are not within the scope of Topic 606 or do not meet the Topic 606 requirements for presentation:
+Added: The presentation above does not include (i) expected revenues from legacy shippers not underpinned by minimum volume commitments, including pipelines where there are no or limited alternative pipeline transportation options, (ii) intersegment revenues and (iii) the amount of consideration associated with certain income generating contracts, which include a fixed minimum level of service, that are either not within the scope of ASC 606 or do not meet the requirements for presentation as remaining performance obligations.
+Added: The following are examples of contracts that are not included in the table above because they are not within the scope of ASC 606 or do not meet the requirements for presentation:
• Minimum volume commitments on certain of our joint venture pipeline systems;
1 unchanged sentence
• Supply and Logistics buy/sell arrangements with future committed volumes;
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• All other Supply and Logistics contracts, due to the election of practical expedients related to variable consideration and short-term contracts, as discussed below;
3 unchanged sentences
We have elected practical expedients to exclude the presentation of remaining performance obligations for variable consideration which relates to wholly unsatisfied performance obligations.
−Removed: Certain contracts do not meet the requirements for presentation of remaining performance obligations under Topic 606 due to variability in amount of performance obligation remaining, variability in the timing of recognition or variability in consideration.
+Added: Certain contracts do not meet the requirements for presentation of remaining performance obligations due to variability in amount of performance obligation remaining, variability in the timing of recognition or variability in consideration.
Acreage dedications do require us to perform future services but do not contain a minimum level of services and are therefore excluded from this presentation.
2 unchanged sentences
Additionally, we have elected practical expedients to exclude contracts with terms of one year or less, and therefore exclude the presentation of remaining performance obligations for short-term transportation, storage and processing services, supply and logistics arrangements, including the non-cancelable period of evergreen arrangements, and any other types of arrangements with terms of one year or less.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Trade Accounts Receivable and Other Receivables, Net
2 unchanged sentences
The majority of our accounts receivable relate to our crude oil supply and logistics activities that can generally be described as high volume and low margin activities, in many cases involving exchanges of crude oil volumes.
+Added: During 2020, macroeconomic and geopolitical conditions including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply has caused liquidity issues impacting many energy companies, which in turn has increased the potential credit risks associated with certain counterparties with which we do business.
To mitigate credit risk related to our accounts receivable, we utilize a rigorous credit review process.
5 unchanged sentences
Otherwise, we generally invoice customers within 30 days of when the products or services were provided and generally require payment within 30 days of the invoice date.
−Removed: We review all outstanding accounts receivable balances on a monthly basis and record a reserve for amounts that we expect will not be fully recovered.
−Removed: We do not apply actual balances against the reserve until we have exhausted substantially all collection efforts.
−Removed: At December 31, 2019 and December 31, 2018, substantially all of our trade accounts receivable (net of allowance for doubtful accounts) were less than 30 days past their scheduled invoice date.
−Removed: Our allowance for doubtful accounts receivable totaled $ 3 million at both December 31, 2019 and December 31, 2018.
−Removed: Although we consider our allowance for doubtful accounts receivable to be adequate, actual amounts could vary significantly from estimated amounts.
+Added: We review all outstanding accounts receivable balances on a monthly basis and record our receivables net of expected credit losses.
+Added: We do not write-off accounts receivable balances until we have exhausted substantially all collection efforts.
+Added: At December 31, 2020 and 2019, substantially all of our trade accounts receivable were less than 30 days past their scheduled invoice date.
+Added: Our expected credit losses are immaterial.
+Added: Although we consider our credit procedures to be adequate to mitigate any significant credit losses, given the sharp decline in demand for crude oil and the drop in prices, the actual amount of current and future credit losses could vary significantly from estimated amounts.
The following is a reconciliation of trade accounts receivable from revenues from contracts with customers to total Trade accounts receivable and other receivables, net as presented on our Consolidated Balance Sheets (in millions):
3 unchanged sentences
Trade accounts receivable and other receivables, net $ 2,553 $ 3,614
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (1) The balance is comprised primarily of accounts receivable associated with buy/sell arrangements that are not within the scope of Topic 606.
+Added: (1) The balance is comprised primarily of accounts receivable associated with buy/sell arrangements that are not within the scope of ASC 606.
Note 4— Net Income/(Loss) Per Class A Share
2 unchanged sentences
accordingly, basic and diluted net income/(loss) per Class B and Class C share has not been presented.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Diluted net income/(loss) per Class A share is determined by dividing net income/(loss) attributable to PAGP by the diluted weighted average number of Class A shares outstanding during the period.
7 unchanged sentences
See Note 18 for information regarding PAGP LTIP awards.
−Removed: For the year ended December 31, 2018, the possible exchange of AAP units would have had a dilutive effect on basic net income per Class A share.
−Removed: For the years ended December 31, 2019 and 2018, the possible exchange of AAP Management Units would have had a dilutive effect on basic net income per Class A share.
+Added: On a weighted-average basis, for the year ended December 31, 2019, the possible exchange of 99 million AAP units would not have had a dilutive effect on basic net income/(loss) per Class A share.
+Added: For the year ended December 31, 2020, the possible exchange of 1 million AAP Management Units would not have had a dilutive effect on basic net income/(loss) per Class A share on a weighted-average basis.
+Added: For the year ended December 31, 2020, our PAGP LTIP awards were antidilutive.
For the years ended December 31, 2019 and 2018 our PAGP LTIP awards were dilutive;
−Removed: however, there were less than 0.1 million dilutive LTIP awards for each period, which did not change the presentation of weighted average Class A shares outstanding or net income per Class A share.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: however, there were less than 0.1 million dilutive LTIP awards for each period, which did not change the presentation of weighted average Class A shares outstanding or net income/(loss) per Class A share.
The following table sets forth the computation of basic and diluted net income/(loss) per Class A share (in millions, except per share data):
7 unchanged sentences
Net income/(loss) attributable to PAGP $ ( 568 ) $ 331 $ 334
−Removed: Incremental net income attributable to PAGP resulting from assumed exchange of AAP units and AAP Management Units
−Removed: Net income/(loss) attributable to PAGP including incremental net income from assumed exchange of AAP units and AAP Management Units
+Added: Incremental net income/(loss) attributable to PAGP resulting from assumed exchange of AAP units and AAP Management Units
( 189 ) 2 262
+Added: Net income/(loss) attributable to PAGP including incremental net income/(loss) from assumed exchange of AAP units and AAP Management Units
+Added: $ ( 757 ) $ 333 $ 596
Basic weighted average Class A shares outstanding
2 unchanged sentences
Diluted net income/(loss) per Class A share $ ( 3.07 ) $ 1.96 $ 2.11
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 5— Inventory, Linefill and Base Gas and Long-term Inventory
−Removed: Inventory primarily consists of crude oil and NGL in pipelines, storage facilities and railcars that are valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools.
+Added: Inventory, including long-term inventory, primarily consists of crude oil and NGL in pipelines, storage facilities and railcars that are valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools.
At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value.
Any resulting adjustments are a component of “Purchases and related costs” on our accompanying Consolidated Statements of Operations.
−Removed: During the years ended December 31, 2019, 2018 and 2017, we recorded charges of $ 11 million, $ 8 million and $ 35 million, respectively, related to the writedown of our crude oil inventory due to declines in prices.
−Removed: A portion of these inventory valuation adjustments was offset by the recognition of gains on derivative instruments being utilized to hedge future sales of our crude oil inventory.
+Added: During the years ended December 31, 2020, 2019 and 2018, we recorded charges of $ 233 million (of which $ 40 million was associated with our long-term inventory), $ 11 million and $ 8 million, respectively, related to the write down of our crude oil and NGL inventory due to declines in prices.
+Added: A portion of these inventory valuation adjustments was offset by the recognition of gains on derivative instruments being utilized to hedge future sales of our crude oil and NGL inventory.
Such gains were recorded to “Supply and Logistics segment revenues” in our accompanying Consolidated Statements of Operations.
5 unchanged sentences
See Note 6 for further discussion regarding impairment of long-lived assets.
−Removed: During 2019, 2018 and 2017, we did not recognize any impairments of linefill and base gas.
+Added: During 2020, 2019 and 2018, we did not recognize any material impairments of linefill and base gas.
Minimum working inventory requirements in third-party assets and other working inventory in our assets that are needed for our commercial operations are included within specific inventory pools in inventory (a current asset) in determining the average cost of operating inventory.
52 unchanged sentences
Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $ 566 million, $ 528 million and $ 455 million, respectively.
−Removed: See “Impairment of Long-Lived Assets” below for a discussion of our policy for the recognition of asset impairments.
+Added: See “Impairment of Long-Lived Assets (Held and Used)” below for a discussion of our policy for the recognition of asset impairments.
As of December 31, 2020, 2019 and 2018, we incurred liabilities for construction in progress that had not been paid of $ 51 million, $ 120 million and $ 206 million, respectively.
−Removed: Impairment of Long-Lived Assets
+Added: Impairment of Long-Lived Assets (Held and Used)
Long-lived assets with recorded values that are not expected to be recovered through future cash flows are written down to estimated fair value in accordance with FASB guidance with respect to the accounting for the impairment or disposal of long-lived assets.
11 unchanged sentences
In addition, when we evaluate property and equipment and other long-lived assets for recoverability, it may also be necessary to review related depreciation estimates and methods.
+Added: During the year ended December 31, 2020, we recognized approximately $ 541 million of non-cash impairment losses, reflected in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: We did not recognize any material impairments during the years ended December 31, 2019 or 2018.
−Removed: During the year ended December 31, 2017, we recognized $ 152 million of non-cash charges related to the write-down of certain of our long-lived rail and other terminal assets included in our Facilities segment due to asset impairments and accelerated depreciation.
−Removed: Such charges are reflected in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Financial Statements.
−Removed: The decline in demand for movements of crude oil by rail in the United States due to sustained unfavorable market conditions resulted in expected decreases in future cash flows for certain of our rail terminal assets, which was a triggering event that required us to assess the recoverability of our carrying value of such long-lived assets.
+Added: Of our impairment losses, approximately $ 415 million was associated with certain pipeline assets in our Transportation segment located in the Central region.
+Added: The macroeconomic and geopolitical conditions that occurred in 2020, including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions and expected lower crude oil production in certain regions, resulted in expected decreases in future cash flows for certain of our assets, which was a triggering event that required us to assess the recoverability of our carrying value of such long-lived assets.
As a result of our impairment review, we wrote off the portion of the carrying amount of these long-lived assets that exceeded their fair value.
−Removed: Our estimated fair values were based upon recent sales prices of comparable facilities, as well as management’s expectation of the market values for such assets based on their industry experience.
−Removed: We consider such inputs to be a Level 3 input in the fair value hierarchy.
+Added: Our estimated fair values (which we consider a Level 3 measurement in the fair value hierarchy) were based upon a discounted cash flow approach utilizing various assumptions and the application of a discount rate of approximately 14 %, which represents our estimate of the cost of capital of a theoretical market participant.
+Added: Such assumptions included (but were not limited to) (i) future commodity volumes (consistent with historical information and estimates of future drilling and completion activity), (ii) tariff rates, (iii) future commodity prices (based on relevant indices and applicable quality and location differentials), and (iv) estimated fixed and variable costs.
+Added: The remaining impairment losses were associated with idled or underutilized assets, including certain pipelines in our Transportation segment located in the Western region and other long-lived assets in our Facilities segment, for which it has been determined that it is unlikely that opportunities will exist in the future to recover our investment in these assets.
+Added: We wrote off substantially all of the carrying value of these assets.
+Added: We did not recognize any material impairments during the years ended December 31, 2019 or 2018.
Note 7— Acquisitions and Divestitures
−Removed: The following acquisitions were accounted for using the acquisition method of accounting (excluding asset acquisitions or acquired interests accounted for under the equity method of accounting mentioned specifically below) and the determination of the fair value of the assets and liabilities acquired has been estimated in accordance with the applicable accounting guidance.
−Removed: In February 2020, we acquired Felix Midstream LLC (“Felix Midstream”) from Felix Energy Holdings II, LLC (“Felix Energy”) for approximately $ 305 million.
−Removed: Felix Midstream owns and operates a newly constructed crude oil gathering system in the Delaware Basin, with associated crude oil storage and truck offloading capacity, and is supported by a long-term acreage dedication.
−Removed: The assets acquired will primarily be included in our Transportation segment.
−Removed: The initial accounting for this acquisition was not complete as of the financial statements issuance date.
+Added: In February 2020, we acquired Felix Midstream LLC, now known as FM Gathering LLC (“FM Gathering”) from Felix Energy Holdings II, LLC for approximately $ 300 million, net of working capital and other adjustments.
+Added: FM Gathering owns and operates a newly constructed crude oil gathering system in the Delaware Basin, with associated crude oil storage and truck offloading capacity, and is supported by a long-term acreage dedication.
+Added: The assets acquired are included in our Transportation and Supply and Logistics segments.
+Added: This acquisition was accounted for using the acquisition method of accounting and the determination of the fair value of the assets acquired and liabilities assumed was determined in accordance with the applicable accounting guidance.
+Added: The assets acquired primarily consisted of property and equipment of $ 115 million and intangible assets of $ 187 million.
+Added: The fair value of the tangible assets is a Level 3 measurement in the fair value hierarchy and was determined using a cost approach.
+Added: The cost approach was based on costs incurred on similar recent construction projects.
+Added: The fair value of the intangible assets is also a Level 3 measurement in the fair value hierarchy and was determined by applying a discounted cash flow approach.
+Added: Such approach utilized discount rates varying from 18 % to 19 %, based on our estimate of the risk that a theoretical market participant would assign to the respective intangible assets.
During the second quarter of 2019, we acquired a crude oil terminal, including tank bottoms and linefill, in Cushing, Oklahoma for cash consideration of $ 44 million, which was accounted for as an asset acquisition.
−Removed: Alpha Crude Connector Acquisition
−Removed: On February 14, 2017, we acquired all of the issued and outstanding membership interests in Alpha Holding Company, LLC for cash consideration of $ 1.215 billion, subject to working capital and other adjustments (the “ACC Acquisition”).
−Removed: The ACC Acquisition was initially funded through borrowings under PAA’s senior unsecured revolving credit facility.
−Removed: Such borrowings were subsequently repaid with proceeds from PAA’s March 2017 issuance of common units to AAP pursuant to the Omnibus Agreement and in connection with our underwritten equity offering.
−Removed: See Note 12 for additional information.
−Removed: Upon completion of the ACC Acquisition, we became the owner of a crude oil gathering system known as the “Alpha Crude Connector” (the “ACC System”) located in the Northern Delaware Basin in Southeastern New Mexico and West Texas.
−Removed: The ACC System comprises approximately 515 miles of gathering and transmission lines and five market interconnects, including to our Basin Pipeline at Wink.
−Removed: During 2017, we made additional interconnects to our existing Northern Delaware Basin systems as well as additional enhancements to increase the ACC System capacity to approximately 350,000 barrels per day, depending on the level of volume at each delivery point.
−Removed: The ACC System is supported by acreage dedications covering approximately 315,000 gross acres, including a significant acreage dedication from one of the largest producers in the region.
−Removed: The ACC System complements our other Permian Basin assets and enhances the services available to the producers in the Northern Delaware Basin.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table reflects the fair value determination (in millions):
−Removed: Identifiable assets acquired and liabilities assumed:
−Removed: Estimated Useful Lives (Years) Recognized amount
−Removed: Property and equipment 3 - 70
−Removed: Intangible assets 20
−Removed: Goodwill N/A 269
−Removed: Other assets and liabilities, net (including $ 4 million of cash acquired)
−Removed: Intangible assets are included in “Other long-term assets, net” on our Consolidated Balance Sheets.
−Removed: The determination of fair value to intangible assets above is comprised of five acreage dedication contracts and associated customer relationships that will be amortized over a remaining weighted average useful life of approximately 20 years.
−Removed: The value assigned to such intangible assets will be amortized to earnings using methods that closely resemble the pattern in which the economic benefits will be consumed.
−Removed: Amortization expense was approximately $ 34 million, $ 25 million and $ 10 million during the years ended December 31, 2019, 2018 and 2017, respectively, and the future amortization expense through 2022 is estimated as follows (in millions):
−Removed: The goodwill arising from the ACC Acquisition, which is tax deductible, represents the anticipated opportunities to generate future cash flows from undedicated acreage and the synergies created between the ACC System and our existing assets.
−Removed: The assets acquired in the ACC Acquisition, as well as the associated goodwill, are primarily included in our Transportation segment.
−Removed: During the year ended December 31, 2017, we incurred approximately $ 6 million of acquisition-related costs associated with the ACC Acquisition.
−Removed: Such costs are reflected as a component of “General and administrative expenses” on our Consolidated Statements of Operations.
−Removed: Pro forma financial information assuming the ACC Acquisition had occurred as of the beginning of the calendar year prior to the year of acquisition were not material for disclosure purposes.
−Removed: Other Acquisitions
−Removed: In February 2017, we acquired a propane marine terminal for cash consideration of approximately $ 41 million.
−Removed: The assets acquired are included in our Facilities segment.
−Removed: We did not recognize any goodwill related to this acquisition.
−Removed: On April 3, 2017, we and an affiliate of Noble Midstream Partners LP (“Noble”) completed the acquisition of Advantage Pipeline, L.L.C.
−Removed: (“Advantage”) through a newly formed 50 /50 joint venture (the “Advantage Joint Venture”).
−Removed: We account for our interest in the Advantage Joint Venture under the equity method of accounting.
−Removed: See Note 9 for additional discussion of our equity method investments.
−Removed: In January 2020, we signed a definitive agreement to sell certain of our Los Angeles Basin crude oil terminals for $ 195 million, subject to certain adjustments.
−Removed: We expect the transaction to close in the second half of 2020, subject to customary closing conditions, including the receipt of regulatory approvals, and anticipate we will recognize a loss of approximately $ 160 million, including goodwill that will be included as part of the disposal group.
+Added: During the year ended December 31, 2020, we received cash proceeds of $ 451 million, primarily from the sale of:
+Added: • certain Los Angeles Basin crude oil terminals previously disclosed in our Facilities segment for proceeds of approximately $ 200 million, subject to certain adjustments;
+Added: • certain NGL terminals previously disclosed in our Facilities segment for proceeds of approximately $ 163 million (including $ 22 million related to a multi-year supply agreement related to the sale), subject to certain adjustments;
+Added: • a 10 % ownership interest in Saddlehorn Pipeline Company, LLC (“Saddlehorn”) for proceeds of approximately $ 78 million, including working capital adjustments (see Note 9 for additional information).
+Added: We recognized a loss related to these assets sales of $ 178 million, including non-cash impairments recognized upon classification to assets held for sale, for the year ended December 31, 2020.
+Added: Such amount is included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations.
PLAINS GP HOLDINGS, L.P.
9 unchanged sentences
Such amounts are included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations.
−Removed: During the year ended December 31, 2017, we sold certain non-core assets for total proceeds of $ 1.083 billion, including:
−Removed: • certain of our Bay Area terminal assets located in California;
−Removed: • our Bluewater natural gas storage facility located in Michigan;
−Removed: • certain non-core pipelines in the Rocky Mountain and Bakken regions, including PAA’s interest in SLC Pipeline LLC;
−Removed: • non-core pipeline segments primarily located in the Midwestern United States;
−Removed: • a 40 % undivided interest in a segment of our Red River Pipeline extending from Cushing, Oklahoma to the Hewitt Station near Ardmore, Oklahoma for our net book value.
−Removed: The Bay Area terminal assets and the Bluewater natural gas storage facility were reported in our Facilities segment.
−Removed: The pipeline assets were reported in our Transportation segment.
−Removed: In the aggregate, including non-cash impairments recognized upon reclassifications to assets held for sale, we recognized a net gain related to pending or completed asset sales of approximately $ 43 million for the year ended December 31, 2017, which is included in “(Gains)/losses on asset sales and asset impairments, net” on our Consolidated Statement of Operations.
−Removed: Such amount is comprised of gains of $ 123 million and losses of $ 80 million.
Note 8— Goodwill
6 unchanged sentences
however, we may first assess certain qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test.
−Removed: In the quantitative test, we compare the fair value of the reporting unit with the respective book values, including goodwill, by using an income approach based on a discounted cash flow analysis.
+Added: In the quantitative test, we compare the fair value of the reporting unit with the respective book values, including goodwill, by using an income approach based on a discounted cash flow model.
This approach requires us to make long-term forecasts of future revenues, expenses and other expenditures.
3 unchanged sentences
If the book value is greater than fair value, then goodwill is impaired by the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill.
+Added: During the first quarter of 2020, we recorded impairment losses of $ 2.515 billion related to goodwill.
+Added: Our market capitalization declined significantly during the first quarter driven by macroeconomic and geopolitical conditions that occurred in 2020, including the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions and expected lower crude oil production in certain regions, that resulted in expected decreases in future cash flows for certain of our assets, which we concluded was a triggering event that required us to perform a quantitative impairment test as of March 31, 2020, utilizing a discounted cash flow approach.
+Added: We applied a discount rate of approximately 14 % in the determination of the fair value of each of our reporting units, which represents our estimate of the cost of capital of a theoretical market participant as of March 31, 2020.
+Added: The fair values of the reporting units are Level 3 measurements in the fair value hierarchy and were based on various inputs, as discussed below.
+Added: The discounted cash flows for each reporting unit were based on six years of projected cash flows and terminal values that we believe would be applied by a theoretical market participant in similar market transactions.
+Added: The discounted cash flows for the respective reporting units utilized various other assumptions, including, but not limited to (i) volumes (based on historical information and estimates of future drilling and completion activity, as well as expectations of future demand recovery), (ii) tariff and storage rates, (iii) future commodity prices (based on relevant indices and applicable quality and location differentials), and (iv) estimated fixed and variable costs.
+Added: We used a range of cash flows for the discounted cash flow calculations based on differing potential market scenarios, but for each of the reporting units, the ultimate outcome of the impairment test was unchanged by the various points within the range of cash flows.
+Added: As a result of the impairment test, we concluded that the carrying value of each of our reporting units exceeded their respective fair values, resulting in a goodwill impairment charge for the entire goodwill balance for each reporting unit.
+Added: Prior to the year ended December 31, 2020, we did not recognize any impairments of goodwill.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: We completed our goodwill impairment test as of June 30, 2019 using a quantitative assessment, which also includes a sensitivity analysis regarding the excess of our reporting unit’s fair value over book value.
−Removed: We determined that the fair value of each reporting unit was greater than its respective book value;
−Removed: therefore, goodwill was not considered impaired.
−Removed: We did not recognize any impairments of goodwill during the last three years.
Goodwill by segment and changes in goodwill is reflected in the following table (in millions):
2 unchanged sentences
Foreign currency translation adjustments 12 4 3 19
−Removed: Divestitures ( 11 ) ( 2 ) — ( 13 )
Balance at December 31, 2019 $ 1,052 $ 982 $ 506 $ 2,540
+Added: Acquisitions 2 — — 2
+Added: Goodwill, gross 1,054 982 506 2,542
+Added: Impairments ( 1,038 ) ( 975 ) ( 502 ) ( 2,515 )
Foreign currency translation adjustments ( 16 ) ( 7 ) ( 4 ) ( 27 )
+Added: Accumulated impairment losses ( 1,054 ) ( 982 ) ( 506 ) ( 2,542 )
Balance at December 31, 2020 $ — $ — $ — $ —
5 unchanged sentences
An impairment of an equity investment results when factors indicate that the investment’s fair value is less than its carrying value and the reduction in value is other than temporary in nature.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Our investments in unconsolidated entities consisted of the following (in millions, except percentage data):
2 unchanged sentences
Type of Operation 2020 2019
−Removed: Advantage Pipeline Holdings LLC (“Advantage Joint Venture”) Crude Oil Pipeline 50 % $ 76 $ 72
BridgeTex Pipeline Company, LLC (“BridgeTex”) Crude Oil Pipeline 20 % $ 421 $ 431
Cactus II Pipeline LLC (“Cactus II”) Crude Oil Pipeline 65 % 752 738
−Removed: Caddo Pipeline LLC Crude Oil Pipeline 50 % 65 65
Capline Pipeline Company LLC Crude Oil Pipeline (2)
−Removed: Cheyenne Pipeline LLC (“Cheyenne”) Crude Oil Pipeline 50 % 44 44
−Removed: Cushing Connect Pipeline & Terminal LLC Crude Oil Pipeline (3)
Diamond Pipeline LLC (“Diamond”) Crude Oil Pipeline 50 % 480 476
1 unchanged sentence
Eagle Ford Terminals Corpus Christi LLC (“Eagle Ford Terminals”) Crude Oil Terminal and Dock 50 % 122 126
−Removed: Midway Pipeline LLC Crude Oil Pipeline 50 % 76 78
Red Oak Pipeline LLC (“Red Oak”) Crude Oil Pipeline 50 % 35 20
−Removed: Saddlehorn Pipeline Company, LLC (“Saddlehorn”) Crude Oil Pipeline 40 % 234 215
−Removed: Settoon Towing, LLC Barge Transportation Services 50 % 59 58
+Added: Saddlehorn Crude Oil Pipeline 30 % 208 234
STACK Pipeline LLC (“STACK”) Crude Oil Pipeline 50 % 22 117
1 unchanged sentence
Wink to Webster Pipeline LLC (“W2W Pipeline”) Crude Oil Pipeline 16 % 330 136
+Added: Other investments 316 343
Total Investments in Unconsolidated Entities $ 3,764 $ 3,683
1 unchanged sentence
(2) The Capline pipeline was taken out of service pending the reversal of the pipeline system.
−Removed: (3) Asset is currently under construction or development by the entity and has not yet been placed in service.
−Removed: Formations and Divestitures
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: During the year ended December 31, 2020, we recognized losses as a result of the write-down of certain of our investments in unconsolidated entities, as discussed further below.
+Added: Such amounts are reflected in “Gain on/(impairment of) investments in unconsolidated entities, net” on our Consolidated Statement of Operations.
+Added: During the third quarter of 2020, we determined that there was an other-than-temporary impairment of our investment in STACK Pipeline LLC as a result of a continued decline of drilling activity and related volumes of crude oil in its area of operation.
+Added: We recognized a loss of $ 91 million related to the write-down of the portion of the carrying amount of our investment that exceeded its fair value.
+Added: The estimated fair value (which we consider a Level 3 measurement in the fair value hierarchy) was based on a discounted cash flow approach utilizing various assumptions and the application of a discount rate of approximately 14 %, which represents our estimate of the cost of capital of a theoretical market participant.
+Added: Such assumptions included (but were not limited to) (i) volumes (consistent with historical information and estimates of future drilling and completion activity), (ii) tariff rates, (iii) future commodity prices (based on relevant indices and applicable quality and location differentials), and (iv) estimated fixed and variable costs.
+Added: In June 2019, we announced the formation of Red Oak, a joint venture with a subsidiary of Phillips 66.
+Added: We own a 50 % interest in Red Oak, which is accounted for under the equity method of accounting.
+Added: Red Oak was developing a new pipeline that would provide crude oil transportation service from Cushing, Oklahoma, and the Permian Basin in West Texas to multiple destinations along the Texas Gulf Coast, including Corpus Christi, Ingleside, Houston and Beaumont, Texas.
+Added: In March 2020, the partners of Red Oak announced they were deferring the Red Oak pipeline project and suspending actions that would require additional capital spending on the project, and that they would re-evaluate demand for the project in light of recent market developments.
+Added: Subsequently, the partners determined that the project would not proceed as previously contemplated.
+Added: We determined that there was an other-than-temporary impairment of our investment in Red Oak, and we recognized a loss of $ 69 million related to the write-down of our investment in Red Oak to the estimated residual value of our share of the net assets during the second quarter of 2020.
+Added: Other investments.
+Added: During the first quarter of 2020, we also recognized a loss of $ 43 million related to the write-down of certain of our investments included in “Other investments” in the table above due to an other-than-temporary impairment related to a decline in market conditions.
Capline LLC .
8 unchanged sentences
We determined the fair value of our investment in Capline LLC to be approximately $ 444 million, resulting in the recognition of a gain of $ 269 million during the year ended December 31, 2019.
−Removed: Such gain is included in “Gain on investment in unconsolidated entities” on our Consolidated Statement of Operations.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: Such gain is included in “Gain on/(impairment of) investment in unconsolidated entities, net” on our Consolidated Statement of Operations.
The fair value of our investment in Capline LLC was based on an income approach utilizing a discounted cash flow analysis.
4 unchanged sentences
The fair value of our investment was determined using significant unobservable inputs, or Level 3 inputs in the fair value hierarchy.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
W2W Pipeline .
1 unchanged sentence
We account for our interest in W2W Pipeline under the equity method of accounting.
−Removed: W2W Pipeline is currently developing a new pipeline system that will originate in the Permian Basin in West Texas and transport crude oil to the Texas Gulf Coast.
−Removed: The pipeline system will provide approximately 1.5 million barrels per day of crude oil and condensate capacity and is targeted to commence operations in 2021.
W2W Pipeline has entered into an undivided joint-ownership arrangement with a subsidiary of Enterprise Products Partners, L.P.
that has acquired 29 % of the capacity of the pipeline segment from Midland, Texas to Webster, Texas, and W2W Pipeline now owns 71 % of this segment of the pipeline.
−Removed: In June 2019, we announced the formation of Red Oak, a joint venture with a subsidiary of Phillips 66.
−Removed: We own a 50 % interest in Red Oak, which is currently developing a new pipeline that will provide crude oil transportation service from Cushing, Oklahoma, and the Permian Basin in West Texas to multiple destinations along the Texas Gulf Coast, including Corpus Christi, Ingleside, Houston and Beaumont, Texas.
−Removed: The pipeline system will provide approximately 1 million barrels per day of capacity, and initial service from Cushing to the Gulf Coast is targeted to commence in the first half of 2021, subject to receipt of applicable permits and regulatory approvals.
−Removed: We account for our interest in Red Oak under the equity method of accounting.
−Removed: In addition to contributing cash for construction of the Red Oak pipeline system, we have also entered into a pipeline capacity lease agreement with Red Oak whereby Red Oak has agreed to lease 260,000 barrels of capacity on our Sunrise II pipeline once the Red Oak pipeline system is operational.
−Removed: Once the Red Oak pipeline system is operational, we will record (i) a $ 155 million increase to our investment in Red Oak associated with our deemed contribution of the value attributable to the capacity lease and (ii) corresponding deferred revenue that will be recognized on a straight-line basis over the initial lease term of 33 years.
+Added: The pipeline originates in the Permian Basin in West Texas and transports crude oil to multiple destinations in the Houston and Galveston market areas.
+Added: The pipeline system, which is currently in partial service, will provide approximately 1.5 million barrels per day of crude oil capacity (1.1 million barrels per day, net to the undivided joint ownership interest).
Cushing Connect .
2 unchanged sentences
The pipeline is expected to be in service during the first quarter of 2021.
−Removed: In the second quarter of 2018, a subsidiary of Oxy and another third party each exercised their purchase options for a 20 % interest and a 15 % interest, respectively, in Cactus II, which owns the Cactus II pipeline system that is currently under construction.
+Added: In the second quarter of 2018, a subsidiary of Oxy and another third party each exercised their purchase options for a 20 % interest and a 15 % interest, respectively, in Cactus II, which owns the Cactus II pipeline system.
Although we own a majority of Cactus II’s equity, we do not have a controlling financial interest in Cactus II because the other members have substantive participating rights.
3 unchanged sentences
Such amount is being recognized in revenue ratably over the life of the contracts.
+Added: In February 2020, we sold a 10 % ownership interest in Saddlehorn for proceeds of approximately $ 78 million and have retained a 30 % ownership interest.
+Added: We recorded a gain of approximately $ 21 million related to this sale, which is included in “Gain on/(impairment of) investments in unconsolidated entities, net” on our Condensed Consolidated Statement of Operations.
+Added: We continue to account for our remaining interest under the equity method of accounting.
During the third quarter of 2018, we sold a 30 % interest in BridgeTex for proceeds of $ 868 million, including working capital adjustments, and have retained a 20 % interest.
−Removed: We recorded a gain of $ 200 million related to this sale,
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: which is included in “Gain on investment in unconsolidated entities” on our Consolidated Statement of Operations.
+Added: We recorded a gain of $ 200 million related to this sale, which is included in “Gain on investment in unconsolidated entities” on our Consolidated Statement of Operations.
We continue to account for our remaining interest under the equity method of accounting.
−Removed: Advantage Joint Venture .
−Removed: On April 3, 2017, we and an affiliate of Noble completed the acquisition of Advantage Pipeline, L.L.C.
−Removed: for a purchase price of $ 133 million through a newly formed 50 /50 joint venture (the “Advantage Joint Venture”).
−Removed: For our 50 % share ($ 66.5 million), we contributed approximately 1.3 million PAA common units with a value of approximately $ 40 million and approximately $ 26 million in cash.
−Removed: Through the acquisition, the Advantage Joint Venture owns a 70-mile, 16-inch crude oil pipeline located in the southern Delaware Basin (the “Advantage Pipeline”), which is contractually supported by a third-party acreage dedication and a volume commitment from our wholly-owned marketing subsidiary.
−Removed: Noble serves as operator of the Advantage Pipeline.
−Removed: We account for our interest in the Advantage Joint Venture under the equity method of accounting.
−Removed: Midway Pipeline LLC.
−Removed: During the fourth quarter of 2017, we and an affiliate of CVR Refining, LP (“CVR Refining”) formed a 50 /50 joint venture, Midway Pipeline LLC, which acquired from us the Cushing to Broome crude oil pipeline system.
−Removed: The Cushing to Broome pipeline system connects CVR Refining’s Coffeyville, Kansas refinery to the Cushing, Oklahoma oil hub.
−Removed: We continue to serve as operator of the pipeline.
−Removed: We account for our interest in Midway Pipeline LLC under the equity method of accounting.
Distributions
2 unchanged sentences
Other distributions received from unconsolidated entities are considered a return of investment and classified as cash flows from investing activities on the Consolidated Statement of Cash Flows.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Contributions
−Removed: We generally fund our portion of development, construction or capital expansion projects of our equity method investees through capital contributions.
+Added: We generally fund our portion of development, construction or capital investment projects of our equity method investees through capital contributions.
Our contributions to these entities increase the carrying value of our investments and are reflected in our Consolidated Statements of Cash Flows as cash used in investing activities.
7 unchanged sentences
The portion of the basis differences attributable to goodwill is not amortized.
−Removed: The majority of the basis difference at both December 31, 2019 and 2018 was related to our ownership interest in BridgeTex.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: The majority of the basis difference at both December 31, 2020 and 2019 was attributable to goodwill related to our ownership interest in BridgeTex and Capline with the remaining basis difference primarily related to capitalized interest incurred during construction of the assets of our unconsolidated entities.
+Added: The basis difference at December 31, 2020 was further impacted by impairments as discussed above.
Summarized Financial Information of Unconsolidated Entities
10 unchanged sentences
Net income $ 826 $ 995 $ 824
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 10— Other Long-Term Assets, Net
15 unchanged sentences
Other long-term assets, net $ 1,517 $ ( 552 ) $ 965 $ 1,349 $ ( 493 ) $ 856
+Added: (1) Amounts for the year ended December 31, 2020 include intangible assets associated with the acquisition of FM Gathering.
+Added: See Note 7 for additional information.
(2) We include rights-of-way, which are intangible assets, in our pipeline and related facilities amounts within property and equipment.
11 unchanged sentences
SHORT-TERM DEBT
−Removed: PAA commercial paper notes, bearing a weighted-average interest rate of 2.2 % (1)
−Removed: PAA senior secured hedged inventory facility, bearing a weighted-average interest rate of 2.7 % (1)
+Added: PAA commercial paper notes, bearing a weighted-average interest rate of 0.7 % and 2.2 %, respectively (1)
+Added: PAA senior secured hedged inventory facility, bearing a weighted-average interest rate of 1.2 % and 2.7 %, respectively (1)
Total short-term debt 831 504
1 unchanged sentence
PAA senior notes:
−Removed: 2.60 % senior notes due December 2019 (2)
−Removed: 5.75 % senior notes due January 2020
5.00 % senior notes due February 2021
6 unchanged sentences
3.55 % senior notes due December 2029
+Added: 3.80 % senior notes due September 2030
6.70 % senior notes due May 2036
11 unchanged sentences
$ 10,213 $ 9,691
−Removed: (1) We classified these PAA commercial paper notes and credit facility borrowings as short-term as of December 31, 2019, as these notes and borrowings were primarily designated as working capital borrowings, were required to be repaid within one year and were primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.
−Removed: (2) As of December 31, 2018, we classified the $500 million, 2.60% PAA senior notes due December 2019 as long-term based on our ability and intent to refinance such amounts on a long-term basis.
+Added: (1) We classified these PAA commercial paper notes and credit facility borrowings as short-term as of December 31, 2020 and 2019, as these notes and borrowings were primarily designated as working capital borrowings, were required to be repaid within one year and were primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.
+Added: (2) During the year ended December 31, 2020, we repurchased $ 17 million of our outstanding senior notes on the open market and recognized a gain of $ 3 million on these transactions, which is included in “Other income/(expense), net” on our Consolidated Statement of Operations.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (3) PAA’s fixed-rate senior notes had a face value of approximately $ 9.0 billion at both December 31, 2019 and 2018.
+Added: (3) PAA’s fixed-rate senior notes had a face value of approximately $ 9.1 billion and $ 9.0 billion as of December 31, 2020 and 2019, respectively.
We estimated the aggregate fair value of these notes as of December 31, 2020 and 2019 to be approximately $ 9.9 billion and $ 9.3 billion, respectively.
1 unchanged sentence
Our determination of fair value is based on reported trading activity near the end of the reporting period.
−Removed: We estimate that the carrying value of outstanding borrowings under the credit facilities and the PAA commercial paper program and GO Zone term loans approximates fair value as interest rates reflect current market rates.
+Added: We estimate that the carrying value of outstanding borrowings under PAA’s credit facilities, commercial paper program and GO Zone term loans approximates fair value as interest rates reflect current market rates.
The fair value estimates for the PAA senior notes, credit facilities, commercial paper program and GO Zone term loans are based upon observable market data and are classified in Level 2 of the fair value hierarchy.
9 unchanged sentences
Such obligations under the committed facility are secured by the financed inventory and the associated accounts receivable and are repaid from the proceeds of the sale of the financed inventory.
−Removed: Borrowings accrue interest based, at PAA’s election, on either the Eurocurrency Rate or the Base Rate, in each case plus a margin based on PAA’s credit rating at the applicable time.
+Added: Borrowings accrue interest based, at PAA’s election, on certain floating rate indices as defined in the credit agreement, in each case plus a margin based on PAA’s credit rating at the applicable time.
The agreement also provides for one or more one -year extensions, subject to applicable approval.
5 unchanged sentences
The credit agreement also provides for the issuance of letters of credit.
−Removed: Borrowings accrue interest based, at PAA’s election, on the Eurocurrency Rate, the Base Rate or the Canadian Prime Rate, in each case plus a margin based on PAA’s credit rating at the applicable time.
+Added: Borrowings accrue interest based, at PAA’s election, on certain floating rate indices as defined in the credit agreement, in each case plus a margin based on PAA’s credit rating at the applicable time.
The agreement also provides for one or more one -year extensions, subject to applicable approval.
4 unchanged sentences
Project), Series 2010 (collectively, the “GO Bonds”).
−Removed: The GO Zone term loans accrue interest in accordance with the interest payable on the related GO Bonds as provided in the GO Bonds Indenture pursuant to which such GO Bonds are issued and governed.
+Added: The GO Zone term loans accrue interest, based on certain floating rate indices, in accordance with the interest payable on the related GO Bonds as provided in the GO Bonds Indenture pursuant to which such GO Bonds are issued and governed.
The purchasers of the two GO Zone term loans have the right to put, at par, the GO Zone term loans in July 2023.
12 unchanged sentences
2020 3.80 % Senior Notes issued at 99.794 % of face value
+Added: September 2030 $ 750 March 15 and September 15
+Added: 2019 3.55 % Senior Notes issued at 99.801 % of face value
December 2029 $ 1,000 June 15 and December 15
−Removed: PAA did not issue any senior unsecured notes during the years ended December 31, 2018 or 2017.
PAA Senior Notes Repayments.
−Removed: During the three years ended December 31, 2019, PAA repaid the following senior unsecured notes (in millions):
+Added: During the three years ended December 31, 2020, PAA repaid the following senior unsecured notes in full (in millions):
Year Description Repayment Date
+Added: 2020 $ 600 million 5.00 % Senior Notes due February 2021
+Added: November 2020 (1)
2019 $ 500 million 2.60 % Senior Notes due December 2019
2 unchanged sentences
December 2019 (2)
−Removed: 2017 $ 400 million 6.13 % Senior Notes due January 2017
−Removed: January 2017 (2)
−Removed: 2017 $ 600 million 6.50 % Senior Notes due May 2018
−Removed: December 2017 (2) (3)
−Removed: 2017 $ 350 million 8.75 % Senior Notes due May 2019
−Removed: December 2017 (2) (3)
+Added: (1) These senior notes were repaid with proceeds from PAA’s 3.80 % senior notes issued in June 2020 and cash on hand.
(2) These senior notes were repaid with proceeds from PAA’s 3.55 % senior notes issued in September 2019 and cash on hand.
−Removed: (2) These senior notes were repaid with cash on hand and proceeds from borrowings under the PAA credit facilities and commercial paper program.
−Removed: (3) In conjunction with the early redemptions of these PAA senior notes, we recognized a loss of approximately $ 40 million, recorded to “Other income/(expense), net” in our Consolidated Statement of Operations.
The weighted average maturity of our senior notes and GO Zone term loans outstanding at December 31, 2020 was approximately 10 years.
23 unchanged sentences
Borrowings and Repayments
−Removed: Total borrowings under the credit facilities and the PAA commercial paper program for the years ended December 31, 2019, 2018 and 2017 were approximately $ 13.3 billion, $ 45.4 billion and $ 60.8 billion, respectively.
−Removed: Total repayments under the credit facilities and the PAA commercial paper program were approximately $ 12.9 billion, $ 46.3 billion and $ 61.5 billion for the years ended December 31, 2019, 2018 and 2017, respectively.
+Added: Total borrowings under PAA’s credit facilities and commercial paper program for the years ended December 31, 2020, 2019 and 2018 were approximately $ 29.3 billion, $ 13.3 billion and $ 45.4 billion, respectively.
+Added: Total repayments under PAA’s credit facilities and commercial paper program were approximately $ 29.0 billion, $ 12.9 billion and $ 46.3 billion for the years ended December 31, 2020, 2019 and 2018, respectively.
The variance in total gross borrowings and repayments is impacted by various business and financial factors including, but not limited to, the timing, average term and method of general partnership borrowing activities.
1 unchanged sentence
In connection with our supply and logistics activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase and transportation of crude oil, NGL and natural gas.
−Removed: These letters of credit are issued under the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility, and our liabilities with respect to these purchase obligations are recorded in accounts payable on our balance sheet in the month the crude oil, NGL or natural gas is purchased.
+Added: These letters of credit are issued under PAA’s senior unsecured revolving credit facility and senior secured hedged inventory facility, and our liabilities with respect to these purchase obligations are recorded in accounts payable on our balance sheet in the month the crude oil, NGL or natural gas is purchased.
Generally, these letters of credit are issued for periods of up to seventy days and are terminated upon completion of each transaction.
10 unchanged sentences
The holders of our Class A and Class B shares are entitled to exercise the rights or privileges available to limited partners under our partnership agreement, but only holders of Class A shares are entitled to participate in our distributions.
−Removed: Our Class C shares are non-economic and provide PAA, as the sole holder of such Class C shares, the right to cast a pass-through vote on behalf of and as directed by the holders of PAA Common Unit Equivalents in the election of eligible directors together with the holders of our Class A and Class B shares.
−Removed: Pursuant to the Omnibus Agreement entered into on November 15, 2016, we issue Class C shares to PAA in an amount equal to the PAA Common Unit Equivalents outstanding excluding common units held by AAP.
+Added: Our Class C shares are non-economic and provide PAA, as the sole holder of such Class C shares, the right to vote, pro rata with the holders of our Class A and Class B shares, in the election of eligible PAGP GP directors.
+Added: Pursuant to the Omnibus Agreement entered into on November 15, 2016, the number of Class C shares that PAA owns will at all times equal the number of outstanding PAA common units, excluding common units held by AAP, and Series A preferred units.
+Added: Thus, the Class C shares function as a “pass-through” voting mechanism through which PAA votes at the direction of and as proxy for the PAA common unitholders, other than AAP, and Series A preferred unitholders in such director elections.
Exchange and Redemption Rights
4 unchanged sentences
Holders of AAP Management Units who convert such units into AAP units and Class B shares will not receive general partner units and thus will not need to include any general partner units in a transfer or the exercise of their Exchange Right.
−Removed: See Note 15 for information regarding the recognition of deferred tax assets associated with units that have been exchanged.
+Added: See Note 15 for information regarding the recognition of deferred tax assets associated the transfer of ownership resulting from Exchange Right exercises.
Additionally, subject to certain limitations, a holder of AAP units (other than us and GP LLC) has the right (a “Redemption Right”) to cause AAP to redeem any or all of such holder’s AAP units in exchange for the distribution of an equivalent number of PAA common units held by AAP (“AAP Unit Redemption”).
1 unchanged sentence
The AAP units transferred to AAP will be canceled, the Class B shares transferred to us will be canceled and the general partner units transferred to us will remain outstanding and increase our ownership percentage in our general partner.
−Removed: During 2019, an affiliate of The Energy & Minerals Group (“EMG”) and a subsidiary of Occidental Petroleum Corporation (“Oxy”) exercised their Exchange Right and Redemption Right.
−Removed: The Redemption Right exercises resulted in the issuance of additional Class C shares to PAA.
−Removed: The Exchange Right exercises resulted in the transfer of a portion of partners’ capital from noncontrolling interests to our Class A shareholders and the associated recognition of a deferred tax asset that was recorded as a component of partners’ capital as it resulted from transactions with shareholders.
+Added: Additionally, we will issue a corresponding number of Class C shares to PAA.
PLAINS GP HOLDINGS, L.P.
6 unchanged sentences
156,111,139 126,984,572 510,925,432
−Removed: Conversion of AAP Management Units
−Removed: — 1,557,860 —
Exchange Right exercises 3,363,199 ( 3,363,199 ) —
−Removed: 4,799,227 ( 4,799,227 ) —
Redemption Right exercises — ( 4,017,035 ) 4,017,035
−Removed: — ( 7,817,547 ) 7,817,547
−Removed: Sales of Class A shares
−Removed: 50,086,326 — —
−Removed: Sales of common units by a subsidiary
−Removed: — — 4,033,567
−Removed: Issuance of common units by a subsidiary in connection with acquisition of interest in Advantage Joint Venture (Note 7)
−Removed: — — 1,252,269
−Removed: Issuances of Series A preferred units by a subsidiary — — 5,307,689
+Added: Issuance of Series A preferred units by a subsidiary — — 1,393,926
Other 11,250 — 601,887
2 unchanged sentences
Exchange Right exercises (1)
+Added: 22,637,818 ( 22,637,818 ) —
Redemption Right exercises (1)
−Removed: Issuance of Series A preferred units by a subsidiary — — 1,393,926
+Added: — ( 31,180,818 ) 31,180,818
Other 15,186 — 1,419,041
1 unchanged sentence
182,138,592 65,785,702 549,538,139
+Added: Conversion of AAP Management Units — 595,117 —
Exchange Right exercises 11,858,457 ( 11,858,457 )
Redemption Right exercises ( 3,882,170 ) 3,882,170
+Added: Repurchase of common units by a subsidiary — — ( 6,222,748 )
Other 54,387 520,201
1 unchanged sentence
194,051,436 50,640,192 547,717,762
+Added: (1) Includes exercises by Oxy and an affiliate of The Energy & Minerals Group (“EMG”).
+Added: See Note 17 for additional information.
Distributions
11 unchanged sentences
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Sales of Class A Shares
−Removed: We did not sell any Class A shares during the years ended December 31, 2019 or 2018.
−Removed: The following table summarizes our sales of Class A shares during the year ended December 31, 2017, all of which occurred in the first four months of the year (net proceeds in millions).
−Removed: Type of Offering Class A Shares Issued Net Proceeds (1)
−Removed: Continuous Offering Program 1,786,326 $ 61 (2)
−Removed: Underwritten Offering 48,300,000 1,474
−Removed: 50,086,326 $ 1,535
−Removed: (1) Amounts are net of costs associated with the offerings.
−Removed: (2) We paid $ 1 million of commissions to our sales agents in connection with issuances of Class A shares under our Continuous Offering Program during the year ended December 31, 2017.
−Removed: Pursuant to the Omnibus Agreement entered into by the Plains Entities on November 15, 2016, we used the net proceeds from the sale of our Class A shares, after deducting the sales agents’ commissions and offering expenses, to purchase from AAP a number of AAP units equal to the number of Class A shares sold in such offering at a price equal to the net proceeds from such offering.
−Removed: Also pursuant to the Omnibus Agreement, immediately following such purchase and sale, AAP used the net proceeds it received from such sale of AAP units to us to purchase from PAA an equivalent number of common units of PAA.
−Removed: See “—Issuances of Units by Subsidiaries” below.
−Removed: The cash purchase by us of additional units issued by AAP and corresponding cash purchase by AAP of additional common units issued by PAA results in the allocation of the fair value of the proceeds between controlling and noncontrolling interests in AAP and PAA based on their respective ownership percentages.
−Removed: Additionally, in accordance with ASC 810, an adjustment in partners’ capital based on historical carrying value is recognized by our Class A shareholders on their increase in ownership of subsidiary entities and a corresponding adjustment is recognized in partners’ capital by our noncontrolling interests due to the dilution of their ownership interest.
−Removed: The allocation to noncontrolling interests results from the difference between the fair value per unit of the additional units issued and the historical carrying value per unit.
−Removed: Such amounts are reflected in “Sales of Class A shares” on our Consolidated Statement of Changes in Partners’ Capital.
Other Comprehensive Income/(Loss)
6 unchanged sentences
We consolidate Red River LLC, with Delek’s 33 % interest accounted for as a noncontrolling interest.
−Removed: During the fourth quarter of 2017, we sold SLC Pipeline LLC, in which we previously owned a 75 % interest and was consolidated under GAAP.
−Removed: As a result of this sale, the noncontrolling interest of 25 % was derecognized.
−Removed: See Note 7 for additional information regarding the sale of SLC Pipeline LLC.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Issuances of Units by Subsidiaries
−Removed: PAA Series B Preferred Unit Issuance.
−Removed: On October 10, 2017, PAA issued 800,000 Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in PAA (the “Series B preferred units”) at a price to the public of $ 1,000 per unit.
−Removed: PAA used the net proceeds of $ 788 million, after deducting the underwriters’ discounts and offering expenses, from the issuance of the Series B preferred units to repay amounts outstanding under its credit facilities and commercial paper program and for general partnership purposes.
−Removed: The Series B preferred units represent perpetual equity interests in PAA, and they have no stated maturity or mandatory redemption date and are not redeemable at the option of the holders under any circumstances.
−Removed: Holders of the Series B preferred units generally have no voting rights, except for limited voting rights with respect to (i) potential amendments to PAA’s partnership agreement that would have a material adverse effect on the existing preferences, rights, powers or duties of the Series B preferred units, (ii) the creation or issuance of any parity securities if the cumulative distributions payable on then outstanding Series B preferred units are in arrears, (iii) the creation or issuance of any senior securities and (iv) the payment of distributions to PAA’s common unitholders out of capital surplus.
−Removed: The Series B preferred units rank, as to the payment of distributions and amounts payable on a liquidation event, pari passu with PAA’s outstanding Series A preferred units and senior to PAA’s common units.
−Removed: The Series B preferred units have a liquidation preference of $ 1,000 per unit.
−Removed: Holders of PAA’s Series B preferred units are entitled to receive, when, as and if declared by PAA’s general partner out of legally available funds for such purpose, cumulative semiannual or quarterly cash distributions, as applicable.
−Removed: Distributions on the Series B preferred units accrue and are cumulative from October 10, 2017, the date of original issue, and are payable semiannually in arrears on the 15th day of May and November through and including November 15, 2022, and after November 15, 2022, quarterly in arrears on the 15th day of February, May, August and November of each year.
−Removed: The initial distribution rate for the Series B preferred units from and including October 10, 2017 to, but not including, November 15, 2022 is 6.125 % per year of the liquidation preference per unit (equal to $ 61.25 per unit per year).
−Removed: On and after November 15, 2022, distributions on the Series B preferred units will accumulate for each distribution period at a percentage of the liquidation preference equal to the Series B Three-Month LIBOR (as defined in and calculated pursuant to the Seventh Amended and Restated Agreement of Limited Partnership of Plains All American Pipeline, L.P.) plus a spread of 4.11 %.
−Removed: Upon the occurrence of certain rating agency events, PAA may redeem the Series B preferred units, in whole but not in part, at a price of $ 1,020 ( 102 % of the liquidation preference) per Series B preferred unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared.
−Removed: In addition, at any time on or after November 15, 2022, PAA may redeem the Series B preferred units, at its option, in whole or in part, at a redemption price of $ 1,000 per Series B preferred unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared.
−Removed: Sales of PAA common units .
−Removed: PAA did not conduct any sales of common units during the years ended December 31, 2019 or 2018.
−Removed: The following table summarizes PAA’s sales of common units for the year ended December 31, 2017 (net proceeds in millions):
−Removed: Year Type of Offering Common Units Sold Net Proceeds (1)
−Removed: 2017 Continuous Offering Program 4,033,567 $ 129 (2)
−Removed: (1) Amounts are net of costs associated with the offerings.
−Removed: (2) PAA paid $ 1 million to sales agents in connection with common unit issuances under its Continuous Offering Program during the year ended December 31, 2017.
−Removed: The proceeds from the issuance of additional common units are shared pro rata among all of PAA’s common unitholders, including AAP, based on their percentage ownership of common units.
−Removed: Additionally, PAA’s capital attributable to AAP was adjusted, in accordance with ASC 810, to reflect the dilution of its interest in PAA as a result of the issuance of additional common units to the public unitholders.
−Removed: Such adjustments are recognized by PAGP in proportion to its ownership interest in AAP, which result in a net increase in partners’ capital attributable to PAGP.
+Added: Additionally, during the year ended December 31, 2020, we received $ 12 million of contributions from noncontrolling interests in Red River LLC related to the Red River pipeline capacity expansion.
+Added: Repurchases of Units by Subsidiary
+Added: Common Equity Repurchase Program.
+Added: In November 2020, the board of directors of our general partner approved a $ 500 million common equity repurchase program (the “Program”) to be utilized as an additional method of returning capital to investors.
+Added: The Program authorizes the repurchase from time to time of up to $ 500 million of PAA common units and/or our Class A shares via open market purchases or negotiated transactions conducted in accordance with applicable regulatory requirements.
+Added: No time limit has been set for completion of the Program, and the Program may be suspended or discontinued at any time.
+Added: The Program does not obligate PAA or us to acquire a particular number of PAA common units or Class A shares.
+Added: Any PAA common units or Class A shares that are repurchased will be canceled.
+Added: Class C shares held by PAA associated with any publicly held common units that are repurchased will also be canceled.
+Added: PAA repurchased 6,222,748 common units under the Program through open market purchases during the year ended December 31, 2020.
+Added: The total purchase price of these repurchases was $ 50 million, including commissions and fees.
+Added: The repurchased common units were canceled immediately upon acquisition, as were the Class C shares held by PAA associated with the repurchased common units.
+Added: We did not repurchase any Class A shares under the Program during the year ended December 31, 2020.
+Added: At December 31, 2020, the remaining available capacity under the program was $ 450 million.
+Added: PAA’s capital attributable to AAP was adjusted, in accordance with ASC 810, to reflect the accretion of its interest in PAA as a result of the repurchase of common units from public unitholders.
+Added: Such adjustment is recognized by PAGP in proportion to its ownership interest in AAP, which results in a net increase in partners’ capital attributable to PAGP.
See Note 15 for additional information regarding the associated impact to the deferred tax asset.
2 unchanged sentences
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Omnibus Agreement.
−Removed: PAA may sell or otherwise issue common units to AAP pursuant to the Omnibus Agreement entered into by the Plains Entities on November 15, 2016.
−Removed: During the year ended December 31, 2017, pursuant to the Omnibus Agreement, PAA sold (i) approximately 1.8 million common units to AAP in connection with our issuance of Class A shares under our Continuous Offering Program and (ii) 48.3 million common units to AAP in connection with our March 2017 underwritten offering.
−Removed: Deferred Tax Asset Impact from the Sale of Subsidiary Units
−Removed: In connection with the sales of AAP units and PAA common units referenced above, a deferred asset was created.
−Removed: The tax basis of our purchase of the additional units was accounted for at fair market value for U.S.
−Removed: federal income tax purposes, but the GAAP basis was impacted by the adjustments that are based on historical carrying value.
−Removed: The resulting basis difference resulted in a deferred tax asset that was recorded as a component of partner’s capital as it results from transactions with shareholders.
−Removed: See Note 15 for additional information.
Subsidiary Distributions
3 unchanged sentences
Distribution (1)
−Removed: Distribution (2)
Year Cash Units
4 unchanged sentences
Distributions on PAA’s Series A preferred units have been paid in cash since the May 2018 distribution.
−Removed: During 2018 and 2017, PAA issued additional Series A preferred units in lieu of cash distributions of $ 37 million and $ 139 million, respectively.
−Removed: (2) PAA paid a pro-rated initial distribution on the Series B preferred units on November 15, 2017 to holders of record at the close of business on November 1, 2017 in an amount equal to approximately $ 5.9549 per unit.
+Added: During 2018, PAA issued additional Series A preferred units in lieu of cash distributions of $ 37 million.
On February 12, 2021, PAA paid a cash distribution of $ 37 million to its Series A preferred unitholders.
13 unchanged sentences
Of this amount, approximately $ 44 million was paid to AAP.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AAP Distributions.
9 unchanged sentences
Of this amount, $ 9 million was distributed to noncontrolling interests and $ 35 million was distributed to us.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other Distributions.
−Removed: During the year ended December 31, 2019, distributions of $ 6 million were paid to noncontrolling interests in Red River LLC.
−Removed: During the year ended December 31, 2017, distributions of $ 2 million were paid to noncontrolling interests in SLC Pipeline LLC.
+Added: During the years ended December 31, 2020 and 2019, distributions of $ 10 million and $ 6 million, respectively, were paid to noncontrolling interests in Red River LLC.
Note 13— Derivatives and Risk Management Activities
We identify the risks that underlie our core business activities and use risk management strategies to mitigate those risks when we determine that there is value in doing so.
−Removed: Our policy is to use derivative instruments for risk management purposes and not for the purpose of speculating on hydrocarbon commodity (referred to herein as “commodity”) price changes.
−Removed: We use various derivative instruments to manage our exposure to (i) commodity price risk, as well as to optimize our profits, (ii) interest rate risk and (iii) currency exchange rate risk.
+Added: We use various derivative instruments to optimize our profits while managing our exposure to (i) hydrocarbon commodity (referred to herein as “commodity”) price risk, (ii) interest rate risk and (iii) currency exchange rate risk.
Our commodity price risk management policies and procedures are designed to help ensure that our hedging activities address our risks by monitoring our derivative positions, as well as physical volumes, grades, locations, delivery schedules and storage capacity.
Our interest rate and currency exchange rate risk management policies and procedures are designed to monitor our derivative positions and ensure that those positions are consistent with our objectives and approved strategies.
+Added: Our policy is to use derivative instruments for risk management purposes and not for the purpose of speculating on changes in commodity prices, interest rates or currency exchange rates.
When we apply hedge accounting, our policy is to formally document all relationships between hedging instruments and hedged items, as well as our risk management objectives for undertaking the hedge.
2 unchanged sentences
Throughout the hedging relationship, retrospective and prospective hedge effectiveness is assessed on a qualitative basis.
+Added: We record all open derivatives on the balance sheet as either assets or liabilities measured at fair value.
+Added: Changes in the fair value of derivatives are recognized currently in earnings unless specific hedge accounting criteria are met.
+Added: For derivatives designated as cash flow hedges, changes in fair value are deferred in AOCI and recognized in earnings in the periods during which the underlying hedged transactions are recognized in earnings.
+Added: Derivatives that are not designated as a hedging instrument and derivatives that do not qualify for hedge accounting are recognized in earnings each period.
+Added: Cash settlements associated with our derivative activities are classified within the same category as the related hedged item in our Condensed Consolidated Statements of Cash Flows.
+Added: Our financial derivatives, used for hedging risk, are governed through ISDA master agreements and clearing brokerage agreements.
+Added: These agreements include stipulations regarding the right of set off in the event that we or our counterparty default on performance obligations.
+Added: If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties.
+Added: At December 31, 2020 and 2019, none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in our credit ratings.
+Added: Although we may be required to post margin on our exchange-traded derivatives transacted through a clearing brokerage account, as described below, we do not require our non-cleared derivative counterparties to post collateral with us.
Commodity Price Risk Hedging
6 unchanged sentences
• A net long position of 5.8 million barrels associated with our crude oil purchases, which was unwound ratably during January 2021 to match monthly average pricing.
−Removed: • A net short time spread position of 9.0 million barrels, which hedges a portion of our anticipated crude oil lease gathering purchases through February 2021.
−Removed: • A net crude oil basis spread position of 5.9 million barrels at multiple locations through December 2021.
−Removed: These derivatives allow us to lock in grade basis differentials.
+Added: • A net short time spread position of 6.6 million barrels, which hedges a portion of our anticipated crude oil lease gathering purchases through March 2022.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: • A net crude oil basis spread position of 0.6 million barrels at multiple locations through December 2021.
+Added: These derivatives allow us to lock in grade basis differentials.
• A net short position of 37.4 million barrels through December 2022 related to anticipated net sales of crude oil and NGL inventory.
−Removed: Storage Capacity Utilization — For capacity allocated to our supply and logistics operations, we have utilization risk in a backwardated market structure.
−Removed: As of December 31, 2019, we used derivatives to manage the risk that a portion of our storage capacity will not be utilized (an average of approximately 1.2 million barrels per month of storage capacity through January 2021).
−Removed: These positions involve no outright price exposure, but instead enable us to profitably use the capacity to store hedged crude oil.
Natural Gas Processing/NGL Fractionation — We purchase natural gas for processing and operational needs.
7 unchanged sentences
Propane sales ( 6.3 ) MMbls
+Added: December 2021
Butane sales ( 2.3 ) MMbls
+Added: December 2021
Condensate sales (WTI position) ( 0.6 ) MMbls
+Added: December 2021
+Added: Fuel gas requirements (1)
+Added: December 2022
Power supply requirements (1)
December 2022
−Removed: (1) Power position to hedge a portion of our power supply requirements at our Canadian natural gas processing and fractionation plants.
+Added: (1) Positions to hedge a portion of our power supply and fuel gas requirements at our Canadian natural gas processing and fractionation plants.
Physical commodity contracts that meet the definition of a derivative but are ineligible, or not designated, for the normal purchases and normal sales scope exception are recorded on the balance sheet at fair value, with changes in fair value recognized in earnings.
We have determined that substantially all of our physical commodity contracts qualify for the normal purchases and normal sales scope exception.
−Removed: Interest Rate Risk Hedging
−Removed: We use interest rate derivatives to hedge the benchmark interest rate associated with interest payments occurring as a result of debt issuances.
−Removed: The derivative instruments we use to manage this risk consist of forward starting interest rate swaps and treasury locks.
−Removed: These derivatives are designated as cash flow hedges.
−Removed: As such, changes in fair value are deferred in AOCI and are reclassified to interest expense as we incur the interest expense associated with the underlying debt.
−Removed: The following table summarizes the terms of our outstanding interest rate derivatives as of December 31, 2019 (notional amounts in millions):
−Removed: Hedged Transaction Number and Types of
−Removed: Derivatives Employed
−Removed: Termination Date
−Removed: Average Rate Locked Accounting
−Removed: Anticipated interest payments 8 forward starting swaps
−Removed: $ 200 6/15/2020 3.06 % Cash flow hedge
−Removed: Currency Exchange Rate Risk Hedging
−Removed: Because a significant portion of our Canadian business is conducted in CAD we use foreign currency derivatives to minimize the risk of unfavorable changes in exchange rates.
−Removed: These instruments include foreign currency exchange contracts, forwards and options.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Our use of foreign currency derivatives include (i) derivatives we use to hedge currency exchange risk created by the use of USD-denominated commodity derivatives to hedge commodity price risk associated with CAD-denominated commodity purchases and sales and (ii) foreign currency exchange contracts we use to manage our Canadian business cash requirements.
−Removed: The following table summarizes our open forward exchange contracts as of December 31, 2019 (in millions):
−Removed: USD CAD Average Exchange Rate
−Removed: Forward exchange contracts that exchange CAD for USD:
−Removed: 2020 $ 202 $ 266 $ 1.00 - $ 1.31
−Removed: Forward exchange contracts that exchange USD for CAD:
−Removed: 2020 $ 207 $ 274 $ 1.00 - $ 1.32
−Removed: Preferred Distribution Rate Reset Option
−Removed: For a period of 30 days following (a) the fifth anniversary of the January 28, 2016 issuance date (the “Issuance Date”) of the PAA Series A preferred units and (b) each subsequent anniversary of the Issuance Date, the holders of the PAA Series A preferred units, acting by majority vote, may make a one-time election to reset the Series A preferred unit distribution rate to equal the then applicable rate of ten-year U.S.
−Removed: Treasury Securities plus 5.85 % (the “Preferred Distribution Rate Reset Option”).
−Removed: A derivative feature embedded in a contract that does not meet the definition of a derivative in its entirety must be bifurcated and accounted for separately if the economic characteristics and risks of the embedded derivative are not clearly and closely related to those of the host contract.
−Removed: The Preferred Distribution Rate Reset Option of the PAA Series A preferred units is an embedded derivative that must be bifurcated from the related host contract, the PAA partnership agreement, and recorded at fair value on our Consolidated Balance Sheets.
−Removed: Corresponding changes in fair value are recognized in “Other income/(expense), net” in our Consolidated Statement of Operations.
−Removed: Summary of Financial Impact
−Removed: We record all open derivatives on the balance sheet as either assets or liabilities measured at fair value.
−Removed: Changes in the fair value of derivatives are recognized currently in earnings unless specific hedge accounting criteria are met.
−Removed: For derivatives designated as cash flow hedges, changes in fair value are deferred in AOCI and recognized in earnings in the periods during which the underlying hedged transactions are recognized in earnings.
−Removed: Derivatives that are not designated as a hedging instrument and derivatives that do not qualify for hedge accounting are recognized in earnings each period.
−Removed: Cash settlements associated with our derivative activities are classified within the same category as the related hedged item in our Consolidated Statements of Cash Flows.
−Removed: A summary of the impact of our derivatives recognized in earnings is as follows (in millions):
−Removed: Year Ended December 31, 2019
−Removed: Location of Gain/(Loss) Commodity
−Removed: Derivatives Foreign Currency Derivatives Preferred Distribution
−Removed: Option Interest Rate Derivatives Total
−Removed: Supply and Logistics segment revenues (1)
−Removed: $ 310 $ 8 $ — $ — $ 318
−Removed: Field operating costs (1)
−Removed: Interest expense, net (2)
−Removed: — — — ( 9 ) ( 9 )
−Removed: Other income/(expense), net (1)
−Removed: Total gain/(loss) on derivatives recognized in net income
−Removed: $ 324 $ 8 $ 2 $ ( 9 ) $ 325
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: Our commodity derivatives are not designated as a hedging relationship, as such, changes in the fair value are reported in earnings.
+Added: A summary of the impact of our commodity derivatives recognized in earnings as follows (in millions):
Year Ended December 31,
−Removed: Location of Gain/(Loss) Commodity
−Removed: Derivatives Foreign Currency Derivatives Preferred Distribution
−Removed: Option Interest Rate Derivatives Total
−Removed: Supply and Logistics segment revenues (1)
2020 2019 2018
−Removed: Field operating costs (1)
−Removed: ( 2 ) — — — ( 2 )
−Removed: Interest expense, net (2)
−Removed: — — — ( 5 ) ( 5 )
−Removed: Other income/(expense), net (1)
−Removed: — — ( 14 ) — ( 14 )
−Removed: Total gain/(loss) on derivatives recognized in net income
−Removed: $ 148 $ ( 23 ) $ ( 14 ) $ ( 5 ) $ 106
−Removed: Year Ended December 31, 2017
−Removed: Location of Gain/(Loss) Commodity
−Removed: Derivatives Foreign Currency Derivatives Preferred Distribution Rate Reset Option Interest Rate Derivatives Total
Supply and Logistics segment revenues $ ( 302 ) $ 310 $ 150
−Removed: $ ( 188 ) $ 8 $ — $ — $ ( 180 )
Field operating costs 5 14 ( 2 )
−Removed: ( 10 ) — — — ( 10 )
−Removed: Depreciation and amortization (2)
−Removed: ( 3 ) — — — ( 3 )
−Removed: Interest expense, net (2)
−Removed: — — — ( 18 ) ( 18 )
−Removed: Other income/(expense), net (1)
−Removed: Total gain/(loss) on derivatives recognized in net income
−Removed: $ ( 201 ) $ 8 $ 13 $ ( 18 ) $ ( 198 )
−Removed: (1) Derivatives not designated as a hedge.
−Removed: (2) Derivatives in hedging relationships.
−Removed: The following table summarizes the derivative assets and liabilities on our Consolidated Balance Sheet on a gross basis as of December 31, 2019 (in millions):
−Removed: Derivatives Not Designated As Hedging Instruments
−Removed: Balance Sheet Location Commodity
−Removed: Derivatives Foreign Currency Derivatives Preferred Distribution Rate Reset Option Total Interest Rate Derivatives (1)
−Removed: Total Derivatives
−Removed: Derivative Assets
−Removed: Other current assets $ 179 $ 4 $ — $ 183 $ — $ 183
−Removed: Other long-term assets, net 24 — — 24 — 24
−Removed: Other current liabilities 32 — — 32 — 32
−Removed: Total Derivative Assets $ 235 $ 4 $ — $ 239 $ — $ 239
−Removed: Derivative Liabilities
−Removed: Other current assets $ ( 37 ) $ ( 2 ) $ — $ ( 39 ) $ — $ ( 39 )
−Removed: Other long-term assets, net — — — — — —
−Removed: Other current liabilities ( 56 ) ( 1 ) — ( 57 ) ( 44 ) ( 101 )
−Removed: Other long-term liabilities and deferred credits ( 12 ) — ( 34 ) ( 46 ) — ( 46 )
−Removed: Total Derivative Liabilities $ ( 105 ) $ ( 3 ) $ ( 34 ) $ ( 142 ) $ ( 44 ) $ ( 186 )
−Removed: (1) Derivatives in hedging relationships.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table summarizes the derivative assets and liabilities on our Consolidated Balance Sheet on a gross basis as of December 31, 2018 (in millions):
−Removed: Derivatives Not Designated As Hedging Instruments
−Removed: Balance Sheet Location Commodity
−Removed: Derivatives Foreign Currency Derivatives Preferred Distribution Rate Reset Option Total Interest Rate Derivatives (1)
−Removed: Total Derivatives
−Removed: Derivative Assets
−Removed: Other current assets $ 441 $ — $ — $ 441 $ 2 $ 443
−Removed: Other long-term assets, net 34 — — 34 — 34
−Removed: Other long-term liabilities and deferred credits 3 — — 3 — 3
−Removed: Total Derivative Assets $ 478 $ — $ — $ 478 $ 2 $ 480
−Removed: Derivative Liabilities
−Removed: Other current assets $ ( 182 ) $ — $ — $ ( 182 ) $ — $ ( 182 )
−Removed: Other long-term assets, net ( 7 ) — — ( 7 ) — ( 7 )
−Removed: Other current liabilities ( 10 ) ( 9 ) — ( 19 ) ( 1 ) ( 20 )
−Removed: Other long-term liabilities and deferred credits ( 9 ) — ( 36 ) ( 45 ) ( 8 ) ( 53 )
−Removed: Total Derivative Liabilities $ ( 208 ) $ ( 9 ) $ ( 36 ) $ ( 253 ) $ ( 9 ) $ ( 262 )
−Removed: (1) Derivatives in hedging relationships.
−Removed: Our financial derivatives, used for hedging risk, are governed through ISDA master agreements and clearing brokerage agreements.
−Removed: These agreements include stipulations regarding the right of set off in the event that we or our counterparty default on performance obligations.
−Removed: If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties.
+Added: Net gain/(loss) from commodity derivative activity $ ( 297 ) $ 324 $ 148
Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists.
2 unchanged sentences
On a daily basis, our account equity (consisting of the sum of our cash balance and the fair value of our open derivatives) is compared to our initial margin requirement resulting in the payment or return of variation margin.
−Removed: The following table provides the components of our net broker receivable/(payable):
−Removed: December 31, 2019 December 31, 2018
+Added: The following table provides the components of our net broker receivable/(payable) (in millions):
Initial margin $ 91 $ 73
1 unchanged sentence
Letters of credit ( 63 ) ( 73 )
−Removed: Net broker payable $ ( 45 ) $ ( 80 )
+Added: Net broker receivable/(payable) $ 318 $ ( 45 )
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table presents information about derivative financial assets and liabilities that are subject to offsetting, including enforceable master netting arrangements (in millions):
+Added: The following table reflects the Consolidated Balance Sheet line items that include the fair values of our commodity derivative assets and liabilities and the effect of the collateral netting.
+Added: Such amounts are presented on a gross basis, before the effects of counterparty netting.
+Added: However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our Consolidated Balance Sheet when the legal right of offset exists.
+Added: Amounts in the table below are presented in millions.
December 31, 2020 December 31, 2019
−Removed: Asset Positions Derivative
−Removed: Liability Positions Derivative
−Removed: Asset Positions Derivative
−Removed: Liability Positions
−Removed: Netting Adjustments:
−Removed: Gross position - asset/(liability) $ 239 $ ( 186 ) $ 480 $ ( 262 )
−Removed: Netting adjustment ( 71 ) 71 ( 192 ) 192
−Removed: Cash collateral paid/(received) ( 45 ) — ( 80 ) —
−Removed: Net position - asset/(liability) $ 123 $ ( 115 ) $ 208 $ ( 70 )
−Removed: Balance Sheet Location After Netting Adjustments:
+Added: Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet
+Added: Commodity Derivatives Commodity Derivatives
+Added: Assets Liabilities Assets Liabilities
+Added: Derivative Assets
Other current assets $ 71 $ ( 314 ) $ 318 $ 75 $ 179 $ ( 37 ) $ ( 45 ) $ 97
Other long-term assets, net 5 — — 5 24 — — 24
+Added: Derivative Liabilities
Other current liabilities 9 ( 40 ) — ( 31 ) 32 ( 56 ) — ( 24 )
Other long-term liabilities and deferred credits — ( 32 ) — ( 32 ) — ( 12 ) — ( 12 )
−Removed: $ 123 $ ( 115 ) $ 208 $ ( 70 )
+Added: Total $ 85 $ ( 386 ) $ 318 $ 17 $ 235 $ ( 105 ) $ ( 45 ) $ 85
+Added: Interest Rate Risk Hedging
+Added: We use interest rate derivatives to hedge the benchmark interest rate associated with interest payments occurring as a result of debt issuances.
+Added: The derivative instruments we use to manage this risk consist of forward starting interest rate swaps and treasury locks.
+Added: These derivatives are designated as cash flow hedges.
+Added: As such, changes in fair value are deferred in AOCI and are reclassified to interest expense as we incur the interest expense associated with the underlying debt.
+Added: The following table summarizes the terms of our outstanding interest rate derivatives as of December 31, 2020 (notional amounts in millions):
+Added: Hedged Transaction Number and Types of
+Added: Derivatives Employed
+Added: Termination Date
+Added: Average Rate Locked Accounting
+Added: Anticipated interest payments 8 forward starting swaps
+Added: $ 200 6/15/2023 1.38 % Cash flow hedge
+Added: Anticipated interest payments 8 forward starting swaps
+Added: $ 200 6/14/2024 0.73 % Cash flow hedge
As of December 31, 2020, there was a net loss of $ 258 million deferred in AOCI.
The deferred net loss recorded in AOCI is expected to be reclassified to future earnings contemporaneously with (i) the earnings recognition of the underlying hedged commodity transactions or (ii) interest expense accruals associated with underlying debt instruments.
−Removed: Of the total net loss deferred in AOCI at December 31, 2019, we expect to reclassify a net loss of $ 10 million to earnings in the next twelve months.
+Added: We reclassified losses of $ 11 million, $ 9 million and $ 5 million during years ended December 31, 2020, 2019 and 2018, respectively.
+Added: Of the total net loss deferred in AOCI at December 31, 2020, we expect to reclassify a loss of $ 13 million to earnings in the next twelve months.
We estimate that substantially all of the remaining deferred loss will be reclassified to earnings through 2054 as the underlying hedged transactions impact earnings.
5 unchanged sentences
Interest rate derivatives, net $ ( 10 ) $ ( 91 ) $ 38
−Removed: At December 31, 2019 and 2018, none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in PAA’s credit ratings.
−Removed: Although we may be required to post margin on our cleared derivatives as described above, we do not require our non-cleared derivative counterparties to post collateral with us.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Added: At December 31, 2020, the net fair value of our interest rate hedges, which were included in “Other long-term assets” on our Consolidated Balance Sheet, totaled $ 46 million.
+Added: At December 31, 2019, the fair value of these hedges was $ 44 million and included in “Other current liabilities.”
+Added: Currency Exchange Rate Risk Hedging
+Added: Because a significant portion of our Canadian business is conducted in CAD we use foreign currency derivatives to minimize the risk of unfavorable changes in exchange rates.
+Added: These instruments include foreign currency exchange contracts, forwards and options.
+Added: Our use of foreign currency derivatives include (i) derivatives we use to hedge currency exchange risk created by the use of USD-denominated commodity derivatives to hedge commodity price risk associated with CAD-denominated commodity purchases and sales and (ii) foreign currency exchange contracts we use to manage our Canadian business cash requirements.
+Added: The following table summarizes our open forward exchange contracts as of December 31, 2020 (in millions):
+Added: USD CAD Average Exchange Rate
+Added: Forward exchange contracts that exchange CAD for USD:
+Added: 2021 $ 46 $ 59 $ 1.00 - $ 1.28
+Added: Forward exchange contracts that exchange USD for CAD:
+Added: 2021 $ 80 $ 104 $ 1.00 - $ 1.30
+Added: These derivatives are not designated as a hedging relationship.
+Added: As such, changes in fair value are recognized in earnings as a component of Supply and Logistics segment revenues.
+Added: For the years ended December 31, 2020, 2019 and 2018, the amounts recognized in earnings for our currency exchange rate hedges were a gain of less than $ 1 million, a gain of $ 8 million and a loss of $ 23 million, respectively.
+Added: At December 31, 2020, the net fair value of these currency exchange rate hedges, which is included in “Other current assets” on our Consolidated Balance Sheet, totaled $ 2 million.
+Added: At December 31, 2019, the net fair value of these currency exchange rate hedges, which was included in “Other current assets” and “Other current liabilities” on our Condensed Consolidated Balance Sheet, totaled $ 2 million and $ 1 million, respectively.
+Added: Preferred Distribution Rate Reset Option
+Added: A derivative feature embedded in a contract that does not meet the definition of a derivative in its entirety must be bifurcated and accounted for separately if the economic characteristics and risks of the embedded derivative are not clearly and closely related to those of the host contract.
+Added: The Preferred Distribution Rate Reset Option of the PAA Series A preferred units is an embedded derivative that must be bifurcated from the related host contract, the PAA partnership agreement, and recorded at fair value on our Consolidated Balance Sheets.
+Added: This embedded derivative is not designated as a hedging relationship and corresponding changes in fair value are recognized in “Other income/(expense), net” in our Consolidated Statement of Operations.
+Added: For the years ended December 31, 2020, 2019 and 2018 we recognized net gains of $ 20 million, $ 2 million and a net loss of $ 14 million, respectively.
+Added: The fair value of the Preferred Distribution Rate Reset Option, which was included in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets, totaled $ 14 million and $ 34 million at December 31, 2020 and 2019, respectively.
+Added: See Note 12 for additional information regarding our Series A preferred units and the Preferred Distribution Rate Reset Option.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Recurring Fair Value Measurements
19 unchanged sentences
We report unrealized gains and losses associated with these contracts in our Consolidated Statements of Operations as Supply and Logistics segment revenues.
−Removed: The fair value of the embedded derivative feature contained in our partnership agreement is based on a valuation model that estimates the fair value of the Series A preferred units with and without the Preferred Distribution Rate Reset Option.
−Removed: This model contains inputs, including our common unit price, ten-year U.S.
−Removed: Treasury rates, default probabilities and timing estimates, some of which involve management judgment.
−Removed: A significant change in these inputs could result in a material change in fair value to this embedded derivative feature.
−Removed: We report unrealized gains and losses associated with this embedded derivative in our Consolidated Statements of Operations in “Other income/(expense), net.”
−Removed: To the extent any transfers between levels of the fair value hierarchy occur, our policy is to reflect these transfers as of the beginning of the reporting period in which they occur.
PLAINS GP HOLDINGS, L.P.
11 unchanged sentences
Note 14— Leases
−Removed: On January 1, 2019, we adopted Topic 842, Leases, using the optional transitional method, thereby applying the new guidance at the effective date, without adjusting the comparative periods.
+Added: On January 1, 2019, we adopted ASC Topic 842, Leases (“Topic 842”) , using the optional transitional method, thereby applying the new guidance at the effective date, without adjusting the comparative periods.
Therefore, results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 840, Leases (“Topic 840”).
17 unchanged sentences
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table presents components of lease cost for the year ended December 31, 2019, including both amounts recognized in income and amounts capitalized (in millions):
−Removed: Lease Cost Year Ended
−Removed: December 31, 2019
+Added: The following table presents components of lease cost, including both amounts recognized in income and amounts capitalized (in millions):
+Added: Year Ended December 31,
+Added: Lease Cost 2020 2019
Operating lease cost $ 111 $ 125
Short-term lease cost 31 35
+Added: Other (1) (2)
Total lease cost $ 150 $ 160
−Removed: (1) Includes less than $ 1 million of net immaterial finance lease costs, variable lease costs and sublease income.
−Removed: Lease cost for the years ended December 31, 2018 and 2017, accounted for in accordance with Topic 840, was $ 199 million and $ 207 million, respectively.
+Added: (1) Includes finance lease costs, variable lease costs and sublease income.
+Added: (2) Includes approximately $ 6 million for the year ended December 31, 2020 associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest.
+Added: Lease cost for the year ended December 31, 2018, accounted for in accordance with Topic 840, was $ 199 million.
The following table presents information related to cash flows arising from lease transactions (in millions):
−Removed: December 31, 2019
+Added: Year Ended December 31,
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases $ 108 $ 116
+Added: Operating cash flows for finance leases $ 5 $ 1
Financing cash flows for finance leases $ 19 $ 18
2 unchanged sentences
Finance leases (1)
−Removed: (1) Includes approximately $ 12 million associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest.
+Added: (1) Includes approximately $ 25 million and $ 12 million for the years ended December 31, 2020 and 2019, respectively, associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest.
Information related to the weighted-average remaining lease term and discount rate is presented in the table below:
−Removed: December 31, 2019
Weighted-average remaining lease term (in years):
7 unchanged sentences
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: The following table presents the amount and location of our operating and finance lease right-of-use assets and liabilities on our Consolidated Balance Sheet (in millions):
−Removed: Leases Balance Sheet Location Year Ended
−Removed: December 31, 2019
+Added: The following table presents the amount and location of our operating and finance lease right-of-use assets and liabilities on our Consolidated Balance Sheets (in millions):
+Added: Leases Balance Sheet Location 2020 2019
Operating lease right-of-use assets Long-term operating lease right-of-use assets, net $ 378 $ 466
13 unchanged sentences
Total lease liabilities $ 476 $ 548
−Removed: (1) Includes approximately $ 12 million right-of-use asset and lease liability associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest.
+Added: (1) Includes right-of-use assets of $ 35 million and $ 12 million and lease liabilities of $ 36 million and $ 12 million as of December 31, 2020 and 2019, respectively, associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the maturity of undiscounted cash flows for future minimum lease payments under noncancelable leases as of December 31, 2020 reconciled to our lease liabilities on our Consolidated Balance Sheet (amounts in millions):
3 unchanged sentences
Thereafter 237 67
+Added: Total 558 143
Present value discount ( 163 ) ( 62 )
Lease liabilities $ 395 $ 81
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(1) Excludes future minimum payments for short-term and other immaterial leases not included on our Consolidated Balance Sheet.
(2) Includes payments of approximately $ 6 million for each of the years ending 2021 through 2025 and approximately $ 64 million thereafter associated with leased storage tanks owned by an equity method investee, in which we own a 50 % interest.
−Removed: We have entered into a lease that had not yet commenced as of December 31, 2019 with future minimum lease payments totaling approximately $ 66 million.
−Removed: This lease will be classified as a finance lease, is for crude oil storage tanks owned by an equity method investee in which we own a 50 % interest, has a lease term of 16 years and will commence in April 2020.
We evaluate all agreements entered into or modified after the date of adoption of Topic 842 that convey to others the use of property or equipment for a term to determine whether the agreement is or contains a lease.
6 unchanged sentences
These agreements are operating leases under Topic 842.
−Removed: For the year ended December 31, 2019, our lease revenue was not material.
+Added: For the years ended December 31, 2020 and 2019, our lease revenue was not material.
The table below presents the maturity of lease payments for operating lease agreements in effect as of December 31, 2020.
This presentation includes minimum fixed lease payments and does not include an estimate of variable lease consideration.
−Removed: These agreements have remaining lease terms ranging from two years to 22 years.
+Added: These agreements have remaining lease terms ranging from one year to 21 years.
The following table presents the undiscounted cash flows expected to be received related to these agreements (in millions):
1 unchanged sentence
Lease revenue $ 40 $ 27 $ 22 $ 18 $ 16 $ 205
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 15— Income Taxes
6 unchanged sentences
As of December 31, 2020 and 2019, we had not recognized any material amounts in connection with uncertainty in income taxes.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Federal and State Taxes
18 unchanged sentences
Canadian federal and provincial income tax ( 70 ) ( 46 ) 132
−Removed: Total deferred income tax expense $ 64 $ 236 $ 909
−Removed: Total income tax expense $ 176 $ 302 $ 937
+Added: Total deferred income tax expense/(benefit) $ ( 218 ) $ 64 $ 236
+Added: Total income tax expense/(benefit) $ ( 167 ) $ 176 $ 302
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The difference between income tax expense based on the statutory federal income tax rate and our effective income tax expense is summarized as follows (in millions):
1 unchanged sentence
2020 2019 2018
−Removed: Income before tax $ 2,238 $ 2,409 $ 896
−Removed: Net income attributable to noncontrolling interests ( 1,731 ) ( 1,773 ) ( 690 )
+Added: Income/(loss) before tax $ ( 2,607 ) $ 2,238 $ 2,409
+Added: Net (income)/loss attributable to noncontrolling interests 1,872 ( 1,731 ) ( 1,773 )
Income taxes attributable to noncontrolling interests 19 ( 66 ) ( 198 )
1 unchanged sentence
Federal statutory income tax rate 21 % 21 % 21 %
−Removed: Income tax at statutory rate $ 93 $ 92 $ 57
−Removed: Deferred tax impact of federal tax reform — — 823
+Added: Income tax expense/(benefit) at statutory rate $ ( 150 ) $ 93 $ 92
Deferred tax rate adjustment 11 10 3
2 unchanged sentences
Canadian federal and provincial income tax ( 19 ) 63 195
−Removed: Canadian withholding tax — — 2
State income tax — 3 3
−Removed: Total income tax expense $ 176 $ 302 $ 937
+Added: Total income tax expense/(benefit) $ ( 167 ) $ 176 $ 302
+Added: The Canadian federal and provincial income tax for the year ended December 31, 2020 reflects the impact of permanent differences primarily related to an impairment of goodwill that was recognized during the year.
+Added: A portion of the goodwill that was impaired had no basis for Canadian income tax purposes and thus was not a deductible expense in determining taxable income, resulting in a permanent difference for Canadian tax purposes.
+Added: See Note 8 for additional information regarding this impairment.
+Added: During the second quarter of 2019, the Alberta government enacted legislation that reduces the Alberta provincial corporate income tax rate from 12 % to 8 % over the period from July 1, 2019 through January 1, 2022.
+Added: As a result, during the second quarter of 2019, we recognized a reduction of our deferred income tax liability of approximately $ 60 million and a corresponding deferred tax benefit.
+Added: In the fourth quarter of 2020, the Alberta government changed the timing of the rate reduction to decrease the corporate income tax rate to 8 % starting July 1, 2020.
PLAINS GP HOLDINGS, L.P.
5 unchanged sentences
Net operating losses 527 406
+Added: Derivative instruments 45 —
Lease liabilities 39 55
10 unchanged sentences
Other long-term liabilities and deferred credits ( 416 ) ( 481 )
−Removed: As a result of the exchange of the ownership interest in AAP in connection with our IPO and all subsequent exchanges, including the exchange of the ownership interests in AAP by EMG and Oxy during 2019, a deferred tax asset was created.
+Added: $ 1,028 $ 799
+Added: As a result of the exchange of the ownership interest in AAP in connection with our IPO and all subsequent exchanges, a deferred tax asset was created.
These transfers of ownership were accounted for at the historical carrying basis for GAAP accounting purposes, but were recorded at the fair market value of the Class A shares at the time of exchange for U.S.
2 unchanged sentences
The deferred tax asset is amortized to deferred income tax expense as the associated basis step-up is realized on our tax returns.
−Removed: In connection with the issuance of AAP units and PAA common units and the associated adjustments to partners’ capital attributable to PAGP, a corresponding change to the deferred tax balance was recorded to partners’ capital.
−Removed: See Note 12 for additional information regarding exchanges and the issuance of units by AAP and PAA.
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act (the “2017 Tax Act”) was signed into law.
−Removed: The 2017 Tax Act changed existing U.S.
−Removed: tax law and included numerous provisions that will affect businesses, including a decrease in the corporate federal income tax rate.
−Removed: Prior to the 2017 Tax Act, the value of our deferred tax asset was calculated based on the effective corporate income tax rate of 35%.
−Removed: As a result of the 2017 Tax Act, the value of our deferred tax asset was re-measured as of December 31, 2017 based on the new 21% corporate federal income tax rate, and the reduction in value was recognized as deferred income tax expense for the year ended December 31, 2017.
−Removed: As of December 31, 2019, our federal, state, and foreign net operating loss carryforwards for income tax purposes were approximately $ 1,793 million, $ 573 million and $ 9 million.
+Added: Also, in connection with the repurchase of common units by PAA and the associated adjustment to partners’ capital attributable to PAGP, a corresponding change to the deferred tax balance was recorded to partners’ capital.
+Added: See Note 12 for additional information regarding exchanges and the repurchase of common units by PAA.
+Added: As of December 31, 2020, our federal, state, and foreign net operating loss carryforwards for income tax purposes were approximately $ 2,328 million, $ 690 million and $ 9 million, respectively.
If not utilized, the state and foreign net operating losses will begin to expire in 2021 and 2034, respectively, and a portion of our federal net operating losses will begin to expire in 2033.
7 unchanged sentences
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: In reference to tax years 2008 to 2014, we have received notices of reassessment (“notices”) from the Canada Revenue Agency and the Alberta Tax and Revenue Administration (the “Canadian Tax Authorities”) related primarily to transfer pricing associated with cross-border intercompany financing transactions.
+Added: As of December 31, 2020, in reference to tax years 2008 to 2015, we had received notices of reassessment (“notices”) from the Canada Revenue Agency and the Alberta Tax and Revenue Administration (the “Canadian Tax Authorities”) related primarily to transfer pricing associated with cross-border intercompany financing transactions.
These notices include assessments, including penalties and interest, associated with these transfer pricing matters totaling approximately $ 91 million (based on the exchange rate as of December 31, 2020).
4 unchanged sentences
As of December 31, 2020, we believe that our tax position associated with these matters is “more likely than not” to be sustained and have not recognized any amounts for uncertainty in income taxes related to these notices.
−Removed: During the second quarter of 2019, the Alberta government enacted legislation that reduces the Alberta provincial corporate income tax rate from 12 % to 8 % over the period from July 1, 2019 through January 1, 2022.
−Removed: As a result, during the second quarter of 2019, we recognized a reduction of our deferred income tax liability of approximately $ 60 million and a corresponding deferred tax benefit.
Note 16— Major Customers and Concentration of Credit Risk
1 unchanged sentence
ExxonMobil Corporation and its subsidiaries accounted for 12 %, 12 % and 14 % of our revenues for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: Phillips 66 Company and its subsidiaries accounted for 11 % of our revenues for each of the years ended December 31, 2019 and 2017.
+Added: Phillips 66 Company and its subsidiaries accounted for 11 % of our revenues for the year ended December 31, 2019.
No other customers accounted for 10% or more of our revenues during any of the three years ended December 31, 2020.
10 unchanged sentences
As of December 31, 2020 and 2019, PAA owned 547,717,762 and 549,538,139 , respectively, Class C shares.
−Removed: The Class C shares represent a non-economic limited partner interest in us that provides PAA, as the sole holder, a “pass-through” voting right through which PAA’s common unitholders and Series A preferred unitholders have the effective right to vote, pro rata with the holders of our Class A and Class B shares, for the election of eligible directors.
+Added: See Note 12 for additional information regarding our Class C shares.
Omnibus Agreement
1 unchanged sentence
• our ability to issue additional Class A shares and use the net proceeds therefrom to purchase a like number of AAP units from AAP, and the corresponding ability of AAP to use the net proceeds therefrom to purchase a like number of PAA common units;
+Added: • our ability to lend proceeds of any future indebtedness incurred by us to AAP, and AAP’s corresponding ability to lend such proceeds to PAA, in each case on substantially the same terms as incurred by us.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: • our ability to lend proceeds of any future indebtedness incurred by us to AAP, and AAP’s corresponding ability to lend such proceeds to PAA, in each case on substantially the same terms as incurred by us.
Transactions with Other Related Parties
Our other related parties include (i) principal owners and their affiliated entities and (ii) entities in which we hold investments and account for under the equity method of accounting (see Note 9 for information regarding such entities).
−Removed: We recognize as our principal owners entities that have a designated representative on the board of directors of our general partner and/or own greater than 10 % of the limited partner interests in AAP.
+Added: We recognize as our principal owners entities that have a designated representative on the board of directors of PAGP GP and/or own greater than 10 % of the limited partner interests in AAP.
Such limited partner interests in AAP translates into a significantly smaller indirect ownership interest in PAA.
10 unchanged sentences
Following these transactions, we no longer recognize EMG or Oxy as a principal owner.
−Removed: During the three years ended December 31, 2019, we recognized sales and transportation revenues, purchased petroleum products and utilized transportation services from our principal owners and their affiliated entities and our equity method investees.
+Added: During the three years ended December 31, 2020, we recognized sales and transportation revenues, purchased petroleum products and utilized transportation and storage services from our principal owners and their affiliated entities and our equity method investees.
These transactions were conducted at posted tariff rates or prices that we believe approximate market.
7 unchanged sentences
$ 451 $ 223 $ 410
−Removed: (1) A majority of these revenues are included in “Supply and Logistics segment revenues” on our Consolidated Statements of Operations.
(1) Crude oil purchases that are part of inventory exchanges under buy/sell transactions are netted with the related sales, with any margin presented in “Purchases and related costs” in our Consolidated Statements of Operations.
2 unchanged sentences
Trade accounts payable to related parties (1) (2)
−Removed: (1) We have a netting arrangement with certain related parties.
−Removed: Receivables and payables are presented net of such amounts.
−Removed: (2) Includes amounts related to crude oil purchases and sales, transportation services and amounts owed to us or advanced to us related to expansion projects of equity method investees where we serve as construction manager.
+Added: (1) Includes amounts related to crude oil purchases and sales, transportation and storage services and amounts owed to us or advanced to us related to investment capital projects of equity method investees where we serve as construction manager.
+Added: (2) We have agreements to store at facilities and transport crude oil on pipelines that are owned by equity method investees, in which we own a 50 % interest.
+Added: A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (3) We have an agreement to transport crude oil at posted tariff rates on a pipeline that is owned by an equity method investee, in which we own a 50 % interest.
−Removed: A portion of our commitment to transport is supported by crude oil buy/sell agreements with third parties with commensurate quantities.
Note 18— Equity-Indexed Compensation Plans
−Removed: PAGP and PAA Long-Term Incentive Plan Awards
+Added: Our equity-indexed compensation plans primarily include PAGP and PAA LTIPs.
Our LTIP awards include both liability-classified and equity-classified awards.
In accordance with FASB guidance regarding share-based payments, the fair value of liability-classified LTIP awards is calculated based on the closing market price of the underlying PAGP share or PAA unit at each balance sheet date and adjusted for the present value of any distributions that are estimated to occur on the underlying shares or units over the vesting period that will not be received by the award recipients.
−Removed: The fair value of equity-classified LTIP awards is calculated based on the closing market price of the underlying PAGP share or PAA unit on the respective grant dates and adjusted for the present value of any distributions that are estimated to occur on the underlying shares or units over the vesting period that will not be received by the award recipient.
−Removed: This fair value is recognized as compensation expense over the service period.
+Added: The fair value for equity-classified awards is calculated in a similar manner on the respective grant dates.
+Added: These fair values are recognized as compensation expense over the service period.
We have elected to recognize forfeitures of awards when they occur.
−Removed: Our LTIP awards contain (i) time based vesting criteria, (ii) performance conditions based on the attainment of certain levels of four quarter trailing distributable cash flow (“DCF”) per PAA common unit (or in some instances, per PAA common unit and common equivalent unit) or (iii) a combination of time based vesting criteria and performance conditions based on four quarter trailing DCF per PAA common unit (or per PAA common unit and common equivalent unit).
+Added: Our LTIP awards contain (i) time-based vesting criteria, (ii) performance conditions, (iii) market conditions or (iv) a combination of time-based vesting criteria and performance conditions.
For awards with performance conditions, expense is accrued over the service period only if the performance condition is considered probable of occurring.
1 unchanged sentence
This is necessary to bring the accrued obligation associated with these awards up to the level it would be if we had been accruing for these awards since the grant date.
+Added: For awards with market conditions, the probable outcomes are determined on the respective dates that the fair values are calculated, and the resulting expense is accrued over the service period.
The following is a summary of the awards authorized under our LTIPs as of December 31, 2020 (in millions):
12 unchanged sentences
Of this amount, 6.9 million PAA LTIP awards and 0.2 million PAGP LTIP awards include DERs.
−Removed: The outstanding and probable LTIP awards are expected to vest at various dates between January 2020 and August 2026.
−Removed: Our accrued liability at December 31, 2019 related to all outstanding liability-classified LTIP awards and DERs was $ 13 million, of which $ 10 million was classified as short-term and $ 3 million was classified as long-term.
−Removed: At December 31, 2018, the accrued liability was $ 27 million, of which $ 19 million was classified as short-term and $ 8 million was classified as
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: These short- and long-term accrued LTIP liabilities are reflected in “Other current liabilities” and “Other long-term liabilities and deferred credits,” respectively, on our Consolidated Balance Sheets.
−Removed: Activity for PAA LTIP awards under our equity-indexed compensation plans denominated in PAA units is summarized in the following table (units in millions):
−Removed: PAA Units (1) (2)
−Removed: Units Weighted Average
−Removed: Fair Value per Unit
−Removed: Outstanding at December 31, 2016 8.9 $ 29.62
−Removed: Granted 0.9 $ 23.52
−Removed: Vested ( 1.7 ) $ 42.12
−Removed: Modified — $ ( 6.04 )
−Removed: Cancelled or forfeited ( 0.8 ) $ 26.99
−Removed: Outstanding at December 31, 2017 7.3 $ 24.68
−Removed: Granted 1.7 $ 23.44
−Removed: Vested ( 1.7 ) $ 32.42
−Removed: Modified — $ 2.15
−Removed: Cancelled or forfeited ( 0.5 ) $ 21.99
−Removed: Outstanding at December 31, 2018 6.8 $ 22.19
−Removed: Granted 3.9 $ 16.17
−Removed: Vested ( 3.3 ) $ 22.44
−Removed: Cancelled or forfeited ( 0.3 ) $ 23.12
−Removed: Outstanding at December 31, 2019 7.1 $ 18.67
−Removed: (1) Amounts do not include PAGP LTIP awards.
−Removed: (2) Approximately 1.4 million, 0.6 million and 0.6 million PAA common units were issued, net of tax withholding of approximately 0.6 million, 0.2 million and 0.2 million units during 2019, 2018 and 2017, respectively, in connection with the settlement of vested awards.
−Removed: The remaining PAA awards (approximately 1.3 million, 0.9 million and 0.9 million units) that vested during 2019, 2018 and 2017, respectively, were settled in cash.
−Removed: Equity-Indexed Compensation Plan Information
−Removed: We refer to all of the LTIPs as our “equity-indexed compensation plans.” The table below summarizes the expense recognized and the value of vested LTIP awards (settled in PAA common units, Class A shares and cash) under our equity-indexed compensation plans and includes both liability-classified and equity-classified awards (in millions):
−Removed: 2019 2018 2017
−Removed: Equity-indexed compensation expense
−Removed: $ 35 $ 79 $ 41
−Removed: LTIP unit or share-settled vestings
−Removed: $ 48 $ 21 $ 16
−Removed: LTIP cash-settled vestings
−Removed: $ 31 $ 22 $ 25
−Removed: Based on the December 31, 2019 fair value measurement and probability assessment regarding future performance conditions based on distributable cash flow measures determined by management, we expect to recognize $ 54 million of additional expense over the life of our outstanding awards related to the remaining unrecognized fair value.
−Removed: Actual amounts may differ materially as a result of a change in the market price of PAA’s common units and our Class A shares and/or probability assessments regarding future distributable cash flow measures.
−Removed: We estimate that the remaining fair value will be recognized in expense as shown below (in millions):
+Added: At December 31, 2020, certain of the outstanding LTIP awards were considered probable of vesting and such awards are expected to vest at various dates between January 2021 and August 2026.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Year Equity-Indexed
−Removed: Compensation Plan Fair Value
−Removed: Amortization (1)
−Removed: (1) Amounts do not include fair value associated with awards containing performance conditions that are not considered to be probable of occurring at December 31, 2019.
Note 19— Commitments and Contingencies
10 unchanged sentences
See Note 14 for additional information.
−Removed: (2) Primarily includes third-party storage and transportation agreements and pipeline throughput agreements, as well as approximately $ 1.8 billion associated with agreements to store, process and transport crude oil at posted tariff rates on pipelines or at facilities that are owned by equity method investees, in which we own a 50 % interest.
−Removed: A portion of our commitment to transport is supported by crude oil buy/sell agreements with third parties with commensurate quantities.
−Removed: Expense associated with these storage, transportation and throughput agreements was approximately $ 236 million, $ 228 million and $ 197 million for 2019, 2018 and 2017, respectively.
+Added: (2) Primarily includes storage, transportation and pipeline throughput agreements, as well as certain rights-of-way easements.
+Added: Expense associated with our storage, transportation and pipeline throughput agreements was approximately $ 265 million, $ 236 million and $ 228 million for 2020, 2019 and 2018, respectively.
+Added: A majority of the storage, transportation and pipeline throughput commitments are associated with agreements to store crude oil at facilities and transport crude oil on pipelines owned by equity method investees, in which we own a 50 % interest, at posted tariff rates or prices that we believe approximate market.
+Added: A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities.
Loss Contingencies — General
5 unchanged sentences
For contingencies where an unfavorable outcome is reasonably possible and the impact would be material to our consolidated financial statements, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Legal Proceedings — General
In the ordinary course of business, we are involved in various legal proceedings, including those arising from regulatory and environmental matters.
+Added: In connection with determining the probability of loss associated with such legal proceedings and whether any potential losses associated therewith are estimable, we take into account what we believe to be all relevant known facts and circumstances, and what we believe to be reasonable assumptions regarding the application of those facts and circumstances to existing agreements, laws and regulations.
Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to fully protect us from losses arising from current or future legal proceedings.
−Removed: Taking into account what we believe to be all relevant known facts and circumstances, and based on what we believe to be reasonable assumptions regarding the application of those facts and circumstances to existing laws and regulations, we do not believe that the outcome of the legal proceedings in which we are currently involved (including those described below) will, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
+Added: Accordingly, we can provide no assurance that the outcome of the various legal proceedings that we are currently involved in, or will become involved with in the future, will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Environmental — General
−Removed: Although over the course of the last several years we have made significant investments in our maintenance and integrity programs, we have experienced (and likely will experience future) releases of hydrocarbon products into the environment from our pipeline, rail, storage and other facility operations.
+Added: Although we have made significant investments in our maintenance and integrity programs, we have experienced (and likely will experience future) releases of hydrocarbon products into the environment from our pipeline, rail, storage and other facility operations.
These releases can result from accidents or from unpredictable man-made or natural forces and may reach surface water bodies, groundwater aquifers or other sensitive environments.
4 unchanged sentences
We also record environmental liabilities assumed in business combinations based on the estimated fair value of the environmental obligations caused by past operations of the acquired company.
−Removed: We record receivables for amounts recoverable from insurance or from third parties under indemnification agreements in the period that we determine the costs are probable of recovery.
+Added: We record receivables for amounts we believe are recoverable from insurance or from third parties under indemnification agreements in the period that we determine the costs are probable of recovery.
Environmental expenditures that pertain to current operations or to future revenues are expensed or capitalized consistent with our capitalization policy for property and equipment.
2 unchanged sentences
At December 31, 2019, our estimated undiscounted reserve for environmental liabilities (including liabilities related to the Line 901 incident) totaled $ 140 million, of which $ 60 million was classified as short-term and $ 80 million was classified as long-term.
−Removed: Such short- and long-term environmental liabilities are reflected in “Other current liabilities” and “Other long-term liabilities and deferred credits,” respectively, on our Consolidated Balance Sheets.
+Added: Such short-term liabilities are reflected in “Trade accounts payable” and “Other current liabilities” and long-term liabilities are reflected in “Other long-term liabilities and deferred credits” on our Consolidated Balance Sheets.
At December 31, 2020, we had recorded receivables totaling $ 97 million for amounts probable of recovery under insurance and from third parties under indemnification agreements, of which $ 96 million was classified as short-term and $ 1 million was classified as long-term.
5 unchanged sentences
Therefore, although we believe that the reserve is adequate, actual costs incurred (which may ultimately include costs for contingencies that are currently not reasonably estimable or costs for contingencies where the likelihood of loss is currently believed to be only reasonably possible or remote) may be in excess of the reserve and may potentially have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Specific Legal, Environmental or Regulatory Matters
5 unchanged sentences
Clean-up and remediation operations with respect to impacted shoreline and other areas has been determined by the Unified Command to be complete, and the Unified Command has been dissolved.
−Removed: Our estimate of the amount of oil spilled, based on relevant facts, data and information, is approximately 2,934 barrels;
+Added: Our estimate of the amount of oil spilled, based on relevant facts, data and information, and as set forth in the Consent Decree described below, is approximately 2,934 barrels;
of this amount, we estimate that 598 barrels reached the Pacific Ocean.
−Removed: As a result of the Line 901 incident, several governmental agencies and regulators initiated investigations into the Line 901 incident, various claims have been made against us and a number of lawsuits have been filed against us.
−Removed: We may be subject to additional claims, investigations and lawsuits, which could materially impact the liabilities and costs we currently expect to incur as a result of the Line 901 incident.
−Removed: Set forth below is a brief summary of actions and matters that are currently pending:
−Removed: On May 21, 2015, we received a corrective action order from the United States Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA”), the governmental agency with jurisdiction over the operation of Line 901 as well as over a second stretch of pipeline extending from Gaviota Pump Station in Santa Barbara County to Emidio Pump Station in Kern County, California (Line 903), requiring us to shut down, purge, review, remediate and test Line 901.
−Removed: The corrective action order was subsequently amended on June 3, 2015;
−Removed: November 12, 2015;
−Removed: and June 16, 2016 to require us to take additional corrective actions with respect to both Lines 901 and 903 (as amended, the “CAO”).
−Removed: Among other requirements, the CAO obligated us to conduct a root cause failure analysis with respect to Line 901 and present remedial work plans and restart plans to PHMSA prior to returning Line 901 and 903 to service;
−Removed: the CAO also imposed a pressure restriction on the section of Line 903 between Pentland Pump Station and Emidio Pump Station, which was subsequently lifted, and required us to take other specified actions with respect to both Lines 901 and 903.
−Removed: We intend to continue to comply with the CAO and to cooperate with any other governmental investigations relating to or arising out of the release.
−Removed: Excavation and removal of the affected section of the pipeline was completed on May 28, 2015.
−Removed: Line 901 and Line 903 have been purged and are not currently operational, with the exception of the Pentland to Emidio segment of Line 903, which remains in service.
−Removed: No timeline has been established for the restart of Line 901 or Line 903.
−Removed: On February 17, 2016, PHMSA issued a Preliminary Factual Report of the Line 901 failure, which contains PHMSA’s preliminary findings regarding factual information about the events leading up to the accident and the technical analysis that has been conducted to date.
−Removed: On May 19, 2016, PHMSA issued its final Failure Investigation Report regarding the Line 901 incident.
−Removed: PHMSA’s findings indicate that the direct cause of the Line 901 incident was external corrosion that thinned the pipe wall to a level where it ruptured suddenly and released crude oil.
−Removed: PHMSA also concluded that there were numerous contributory causes of the Line 901 incident, including ineffective protection against external corrosion, failure to detect and mitigate the corrosion and a lack of timely detection and response to the rupture.
−Removed: The report also included copies of various engineering and technical reports regarding the incident.
−Removed: By virtue of its statutory authority, PHMSA has the power and authority to impose fines and penalties on us and cause civil or criminal charges to be brought against us.
−Removed: While to date PHMSA has not imposed any such fines or penalties or brought any such civil or criminal charges with respect to the Line 901 release, their investigation is still open and we are likely to have fines or penalties imposed upon us, and civil charges brought against us, in the future.
−Removed: In late May of 2015, the California Attorney General’s Office and the District Attorney’s office for the County of Santa Barbara (collectively, the “Prosecutors”) began investigating the Line 901 incident to determine whether any applicable state or local laws had been violated.
−Removed: On May 16, 2016, PAA and one of its employees were charged by a California state grand jury, pursuant to an indictment filed in California Superior Court, Santa Barbara County (the “May 2016 Indictment”), with alleged violations of California law in connection with the Line 901 incident.
−Removed: The May 2016 Indictment included a total of 46 counts against PAA.
−Removed: On July 28, 2016, at an arraignment hearing held in California Superior Court in Santa Barbara County, PAA pled not guilty to all counts.
−Removed: Between May of 2016 and May of 2018, 31 of the criminal charges against PAA (including one felony charge) and all of the criminal charges against our employee, were dismissed.
−Removed: The remaining 15 charges were the subject of a jury trial in California Superior Court in Santa Barbara County that began in May of 2018.
−Removed: The jury returned a verdict on September 7, 2018, pursuant to which we were (i) found guilty on one felony discharge count and eight misdemeanor counts (which included one reporting count, one strict liability discharge count and six strict liability animal takings counts) and (ii) found not guilty on one strict liability animal takings count.
−Removed: The jury deadlocked on three counts (including two felony discharge counts and one strict liability animal takings count), and two misdemeanor discharge counts were dropped.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: 25, 2019, PAA was sentenced to pay fines and penalties in the aggregate amount of just under $ 3.35 million for the convictions covered by the September 2018 jury verdict (the “2019 Sentence”).
+Added: As a result of the Line 901 incident, several governmental agencies and regulators initiated investigations into the Line 901 incident, various claims have been made against us and a number of lawsuits have been filed against us, the majority of which have been resolved.
+Added: Set forth below is a brief summary of actions and matters that are currently pending or recently resolved:
+Added: As the “responsible party” for the Line 901 incident we are liable for various costs and for certain natural resource damages under the Oil Pollution Act.
+Added: In this regard, following the Line 901 incident, we entered into a cooperative Natural Resource Damage Assessment (“NRDA”) process with the federal and state agencies designated or authorized by law to act as trustees for the natural resources of the United States and the State of California (collectively, the “Trustees”).
+Added: Additionally, various government agencies sought to collect civil fines and penalties under applicable state and federal regulations.
+Added: On March 13, 2020, the United States and the People of the State of California filed a civil complaint against Plains All American Pipeline, L.P.
+Added: and Plains Pipeline L.P.
+Added: along with a pre-negotiated settlement agreement in the form of a Consent Decree (the “Consent Decree”) that was signed by the United States Department of Justice, Environmental and Natural Resources Division, the United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration, the EPA, CDFW, the California Department of Parks and Recreation, the California State Lands Commission, the California Department of Forestry and Fire Protection’s Office of the State Fire Marshal, Central Coast Regional Water Quality Control Board, and Regents of the University of California.
+Added: The Consent Decree was approved and entered by the Federal District Court for the Central District of California on October 14, 2020.
+Added: Pursuant to the terms of the Consent Decree, Plains paid $ 24 million in civil penalties and $ 22.325 million as compensation for injuries to, destruction of, loss of, or loss of use of natural resources resulting from the Line 901 incident.
+Added: The Consent Decree also contains requirements for implementing certain agreed-upon injunctive relief, as well as requirements for potentially restarting Line 901 and the Sisquoc to Pentland portion of Line 903.
+Added: The Consent Decree resolved all claims asserted by the regulatory agencies.
+Added: Following an investigation and grand jury proceedings, in May of 2016, PAA was charged by a California state grand jury, pursuant to an indictment filed in California Superior Court, Santa Barbara County (the “May 2016 Indictment”), with alleged violations of California law in connection with the Line 901 incident.
+Added: Fifteen charges from the May 2016 Indictment were the subject of a jury trial in California Superior Court in Santa Barbara County, and the jury returned a verdict on September 7, 2018, pursuant to which we were (i) found guilty on one felony discharge count and eight misdemeanor counts (which included one reporting count, one strict liability discharge count and six strict liability animal takings counts) and (ii) found not guilty on one strict liability animal takings count.
+Added: The remaining counts were subsequently dismissed by the Court.
+Added: On April 25, 2019, PAA was sentenced to pay fines and penalties in the aggregate amount of just under $ 3.35 million for the convictions covered by the September 2018 jury verdict (the “2019 Sentence”).
The fines and penalties imposed in connection with the 2019 Sentence have been paid.
−Removed: The Superior Court also indicated that it would conduct further hearings on the issue of whether there were any “direct victims” of the spill that are entitled to restitution under applicable law.
−Removed: We do not anticipate that the victim restitution, if any, imposed as a result of these proceedings will have a material adverse impact on the financial position or operations of the Partnership.
−Removed: In April of 2019, the Prosecutors announced their intent to re-try the two felony discharge counts for which no jury verdict was returned.
−Removed: The strict liability animal taking count for which no jury verdict was returned has been dismissed.
−Removed: On October 7, 2019, upon motion from Plains, the court dismissed the two remaining felony counts and vacated a second trial on these counts.
−Removed: Also in late May of 2015, the United States Attorney for the Department of Justice, Central District of California, Environmental Crimes Section (“DOJ”) began an investigation into whether there were any violations of federal criminal statutes in connection with the Line 901 incident, including potential violations of the federal Clean Water Act.
−Removed: We have cooperated with the DOJ’s investigation by responding to their requests for documents and access to our employees.
−Removed: Consistent with the terms of our governing organizational documents, we are funding our employees’ defense costs, including the costs of separate counsel engaged to represent such individuals.
−Removed: On August 26, 2015, we received a Request for Information from the EPA relating to Line 901.
−Removed: We have provided various responsive materials to date and we will continue to do so in the future in cooperation with the EPA.
−Removed: Except in connection with the May 2016 Indictment and the 2019 Sentence, to date no civil enforcement actions or criminal charges with respect to the Line 901 release have been brought against PAA or any of its affiliates, officers or employees by PHMSA, the DOJ, the EPA, the California Attorney General or the California Department of Fish and Wildlife, and no fines or penalties have been imposed by such governmental agencies;
−Removed: however, the investigations being conducted by such agencies are still open and we may have fines or penalties imposed upon us, our officers or our employees in the future, or civil actions or criminal charges brought against us, our officers or our employees in the future, whether by those or other governmental agencies.
+Added: The only pending matter relating to these proceedings is that the Superior Court indicated that it would conduct further hearings on the issue of whether there were any “direct victims” of the spill that are entitled to restitution under applicable law.
Shortly following the Line 901 incident, we established a claims line and encouraged any parties that were damaged by the release to contact us to discuss their damage claims.
−Removed: We have received a number of claims through the claims line and we have been processing those claims and making payments as appropriate.
−Removed: In addition, we have also had nine class action lawsuits filed against us, six of which have been administratively consolidated into a single proceeding in the United States District Court for the Central District of California.
−Removed: In general, the plaintiffs are seeking to establish different classes of claimants that have allegedly been damaged by the release.
−Removed: To date, the court has certified three sub-classes of claimants and denied certification of the other proposed sub-class.
−Removed: On appeal, the Ninth Circuit Court of Appeals overturned the certification of the oil-industry sub-class, so the remaining sub-classes that have been certified include (i) commercial fishermen who landed fish in certain specified fishing blocks in the waters adjacent to Santa Barbara County or persons or businesses who resold commercial seafood landed in such areas;
−Removed: and (ii) beachfront property and easement owners whose properties were oiled.
−Removed: We are also defending a separate class action lawsuit proceeding in the United States District Court for the Central District of California brought on behalf of the Line 901 and Line 903 easement holders seeking injunctive relief as well as compensatory damages.
−Removed: There were also two securities law class action lawsuits filed on behalf of certain purported investors in PAA and/or PAGP against PAA, PAGP and/or certain of their respective officers, directors and underwriters.
−Removed: Both of these lawsuits were consolidated into a single proceeding in the United States District Court for the Southern District of Texas.
−Removed: In general, these lawsuits alleged that the various defendants violated securities laws by misleading investors regarding the integrity of PAA’s pipelines and related facilities through false and misleading statements, omission of material facts and concealing of the true extent of the spill.
−Removed: The plaintiffs claimed unspecified damages as a result of the reduction in value of their investments in PAA and PAGP, which they attributed to the alleged wrongful acts of the defendants.
−Removed: PAA and PAGP, and the other defendants, denied the allegations in, and moved to dismiss these lawsuits.
−Removed: On March 29, 2017, the Court ruled in our favor dismissing all claims against all defendants.
−Removed: Plaintiffs refiled their complaint.
−Removed: On April 2, 2018, the Court dismissed all of the refiled claims against all defendants with prejudice.
−Removed: Plaintiffs appealed the dismissal, and on July 16, 2019 the Fifth Circuit Court of Appeals affirmed the dismissal.
−Removed: The time period for a further appeal to the U.S.
−Removed: Supreme Court has lapsed so this ruling is now final.
−Removed: Consistent with and subject to the terms of our governing organizational documents (and to the extent applicable, insurance policies), we indemnified and funded the defense costs of our officers and directors in connection with this lawsuit;
−Removed: we also indemnified and funded the defense costs of our underwriters pursuant to the terms of the underwriting agreements we previously entered into with such underwriters.
+Added: We received a number of claims through the claims line and we have processed those claims and made payments as appropriate.
+Added: Nine class action lawsuits were filed against us;
+Added: however, after various claims were either dismissed or consolidated, two proceedings remain pending in the United States District Court for the Central District of California.
+Added: In the first proceeding, the plaintiffs claim two different classes of claimants were damaged by the release:
+Added: (i) commercial fishermen who landed fish in certain specified fishing blocks in the waters off the coast of Southern California or persons or businesses who resold commercial seafood caught in those areas;
+Added: and (ii) owners and lessees of residential beachfront properties, or properties with a private easement to a beach, where plaintiffs claim oil from the spill washed up.
+Added: We are vigorously defending against those claims.
+Added: A September 2020 trial date initially set by the Court has been postponed indefinitely due to COVID-19 related trial suspensions.
+Added: In the second proceeding, the plaintiffs seek a declaratory judgment that Plains’ right-of-way agreements would not allow Plains to lay a new pipeline to replace Line 901 and/or the non-operating segment of Line 903 without paying additional compensation.
+Added: No trial date has been set in that action.
+Added: In addition, four unitholder derivative lawsuits were filed by certain purported investors in PAA against PAGP and certain of PAA’s affiliates, officers and directors.
+Added: After various claims were either dismissed or consolidated, one proceeding against PAGP remains pending in Delaware Chancery Court.
+Added: Generally, the plaintiffs claim that PAGP failed to exercise proper oversight over PAA’s pipeline integrity efforts.
+Added: We will vigorously defend the claim.
+Added: No trial date has been set in this action.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: In addition, four unitholder derivative lawsuits have been filed by certain purported investors in PAA against PAGP and certain of PAA’s affiliates, officers and directors.
−Removed: One lawsuit was filed in State District Court in Harris County, Texas and subsequently dismissed by the Court.
−Removed: Two of these lawsuits were filed in the United States District Court for the Southern District of Texas and were administratively consolidated into one action and later dismissed on the basis that Plains Partnership agreements require that derivative suits be filed in Delaware Chancery Court.
−Removed: Following the order dismissing the Texas Federal Court suits, a new derivative suit brought by different plaintiffs was filed in Delaware Chancery Court and subsequently dismissed without prejudice.
−Removed: Plaintiffs amended and refiled their complaint on June 3, 2019.
−Removed: All claims against the officers and directors of the PAA and all affiliates of PAA, except PAGP, were dismissed with prejudice in January 2020.
−Removed: Consistent with and subject to the terms of our governing organizational documents (and to the extent applicable, insurance policies), we have indemnified and funded the defense costs of our officers and directors in connection with these lawsuits.
−Removed: We will vigorously defend the remaining derivative claim against PAGP.
−Removed: We have also received several other individual lawsuits and complaints from companies, governmental agencies and individuals alleging damages arising out of the Line 901 incident.
−Removed: These lawsuits and claims generally seek compensatory and punitive damages, and in some cases permanent injunctive relief.
−Removed: In addition to the foregoing, as the “responsible party” for the Line 901 incident we are liable for various costs and for certain natural resource damages under the Oil Pollution Act.
−Removed: In this regard, following the Line 901 incident, we entered into a cooperative Natural Resource Damage Assessment (“NRDA”) process with the following federal and state agencies designated or authorized by law to act as trustees for the natural resources of the United States and the State of California (collectively, the “Trustees”):
−Removed: the United States Department of Interior, the National Oceanic and Atmospheric Administration, CDFW, the California Department of Parks and Recreation, the California State Lands Commission, and the Regents of the University of California.
−Removed: As part of the NRDA process, PAA and the Trustees jointly and independently planned and conducted a number of natural resource assessment activities related to the Line 901 incident.
−Removed: We are currently involved in discussions with the Trustees to determine the amount we will be required to pay as compensation for injuries to, destruction of, loss of, or loss of use of natural resources resulting from the Line 901 incident.
−Removed: We also have exposure to the payment of additional fines, penalties and costs under other applicable federal, state and local laws, statutes and regulations.
−Removed: We are actively involved in discussions with the relevant federal and state agencies to determine the amount of such fines, penalties and costs, and we have included an estimate of such costs in the loss accrual described below.
−Removed: To the extent any unpaid natural resource damages or other fines, penalties or costs are reasonably estimable, we have included an estimate of such costs in the loss accrual described below.
−Removed: Taking the foregoing into account, as of December 31, 2019, we estimate that the aggregate total costs we have incurred or will incur with respect to the Line 901 incident will be approximately $ 390 million, which estimate includes actual and projected emergency response and clean-up costs, natural resource damage assessments and certain third party claims settlements, as well as estimates for fines, penalties and certain legal fees.
+Added: We have also received several other individual lawsuits and claims from companies, governmental agencies and individuals alleging damages arising out of the Line 901 incident.
+Added: These lawsuits and claims generally seek restitution, compensatory and punitive damages, and/or injunctive relief.
+Added: The majority of these lawsuits have been settled or dismissed by the court.
+Added: Remaining claims include claims for lost revenue or profit asserted by a former oil producer that declared bankruptcy and shut in its offshore production platform following the Line 901 incident, a state agency that received royalties on oil produced from that platform until it was abandoned by its owner, and various companies and individuals who provided labor, goods, or services associated with oil production activities they claim were disrupted following the Line 901 incident.
+Added: The courts have not finally resolved whether those claims are legally viable;
+Added: however, if necessary, we will mount vigorous defenses to them.
+Added: We may be subject to additional claims and lawsuits, which could materially impact the liabilities and costs we currently expect to incur as a result of the Line 901 incident.
+Added: Taking the foregoing into account, as of December 31, 2020, we estimate that the aggregate total costs we have incurred or will incur with respect to the Line 901 incident will be approximately $ 460 million, which estimate includes actual and projected emergency response and clean-up costs, natural resource damage assessments, fines and penalties payable pursuant to the Consent Decree and certain third-party claims settlements, as well as estimates for certain legal fees.
We accrue such estimates of aggregate total costs to “Field operating costs” in our Consolidated Statements of Operations.
This estimate considers our prior experience in environmental investigation and remediation matters and available data from, and in consultation with, our environmental and other specialists, as well as currently available facts and presently enacted laws and regulations.
−Removed: We have made assumptions for (i) the duration of the natural resource damage assessment process and the ultimate amount of damages determined, (ii) the resolution of certain third party claims and lawsuits, but excluding claims and lawsuits with respect to which losses are not probable and reasonably estimable, and excluding future claims and lawsuits, (iii) the determination and calculation of fines and penalties, but excluding fines and penalties that are not probable or reasonably estimable and (iv) the nature, extent and cost of legal services that will be required in connection with all lawsuits, claims and other matters requiring legal or expert advice associated with the Line 901 incident.
+Added: We have made assumptions for (i) the resolution of certain third-party claims and lawsuits, but excluding claims and lawsuits with respect to which losses are not probable and reasonably estimable, and excluding future claims and lawsuits and (ii) the nature, extent and cost of legal services that will be required in connection with all lawsuits, claims and other matters requiring legal or expert advice associated with the Line 901 incident.
Our estimate does not include any lost revenue associated with the shutdown of Line 901 or 903 and does not include any liabilities or costs that are not reasonably estimable at this time or that relate to contingencies where we currently regard the likelihood of loss as being only reasonably possible or remote.
1 unchanged sentence
however, this estimate is subject to uncertainties associated with the assumptions that we have made.
−Removed: For example, the amount of time it takes for us to resolve all of the current and future lawsuits, claims and investigations that relate to the Line 901 incident could turn out to be significantly longer than we have assumed, and as a result the costs we incur for legal services could be significantly higher than we have estimated.
−Removed: In addition, with respect to fines and penalties, the ultimate amount of any fines and penalties assessed against us depends on a wide variety of factors, many of which are not estimable at this time.
−Removed: Where fines and penalties are probable and estimable, we have included them in our estimate, although such estimates could turn out to be wrong.
+Added: For example, the amount of time it takes for us to resolve all of the current and future lawsuits and claims that relate to the Line 901 incident could turn out to be significantly longer than we have assumed, and as a result the costs we incur for legal services could be significantly higher than we have estimated.
Accordingly, our assumptions and estimates may turn out to be inaccurate and our total costs could turn out to be materially higher;
therefore, we can provide no assurance that we will not have to accrue significant additional costs in the future with respect to the Line 901 incident.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: As of December 31, 2019, we had a remaining undiscounted gross liability of $ 83 million related to this event, of which approximately $ 50 million is presented in “Other current liabilities” on our Consolidated Balance Sheet, with the remainder presented in “Other long-term liabilities and deferred credits.” We maintain insurance coverage, which is subject to certain exclusions and deductibles, in the event of such environmental liabilities.
+Added: As of December 31, 2020, we had a remaining undiscounted gross liability of $ 86 million related to this event, which is reflected in “Trade accounts payable” and “Other current liabilities” on our Consolidated Balance Sheet.
+Added: We maintain insurance coverage, which is subject to certain exclusions and deductibles, in the event of such environmental liabilities.
Subject to such exclusions and deductibles, we believe that our coverage is adequate to cover the current estimated total emergency response and clean-up costs, claims settlement costs and remediation costs and we believe that this coverage is also adequate to cover any potential increase in the estimates for these costs that exceed the amounts currently identified.
1 unchanged sentence
Therefore, as of December 31, 2020, we have recognized a receivable of approximately $ 90 million for the portion of the release costs that we believe is probable of recovery from insurance, net of deductibles and amounts already collected.
−Removed: Of this amount, approximately $ 28 million is recognized as a current asset in “Trade accounts receivable and other receivables, net” on our Consolidated Balance Sheet, with the remainder in “Other long-term assets, net.” We have completed the required clean-up and remediation work as determined by the Unified Command and the Unified Command has been dissolved;
−Removed: however, we expect to make payments for additional costs associated with restoration of the impacted areas, as well as natural resource damage assessment and compensation, legal, professional and regulatory costs, in addition to fines and penalties, during future periods.
−Removed: San Joaquin Valley Air Pollution Control District.
−Removed: After conducting inspections of the Plains LPG Services, L.P.
−Removed: (“Plains LPG”) facility in Shafter, California during March and June of 2018, the San Joaquin Valley Air Pollution Control District (the “District”) issued four Notices of Violation which totaled $ 597,000 in the aggregate.
−Removed: Plains LPG entered into a settlement with the District whereby Plains LPG agreed to enter the District’s INSPECT program (a self-reporting and inspection program) and pay a reduced fine of $ 275,000 , which was paid in July 2019 .
+Added: Such amount is recognized as a current asset in “Trade accounts receivable and other receivables, net” on our Consolidated Balance Sheet.
+Added: We have completed the required clean-up and remediation work as determined by the Unified Command and the Unified Command has been dissolved;
+Added: however, we expect to make payments for additional costs associated with restoration of the impacted areas, as well as legal, professional and regulatory costs during future periods.
Environmental Remediation
4 unchanged sentences
Under such laws and regulations, we could be required to remove or remediate hazardous liquids or associated wastes (including wastes disposed of or released by prior owners or operators) and to clean up contaminated property (including contaminated groundwater).
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
We maintain insurance of various types with varying levels of coverage that we consider adequate under the circumstances to cover our operations and properties.
8 unchanged sentences
However, such insurance does not cover every potential risk that might occur, associated with operating pipelines, terminals and other facilities and equipment, including the potential loss of significant revenues and cash flows.
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The occurrence of a significant event not fully insured, indemnified or reserved against, or the failure of a party to meet its indemnification obligations, could materially and adversely affect our operations and financial condition.
4 unchanged sentences
In addition, although we believe that we have established adequate reserves and liquidity to the extent such risks are not insured, costs incurred in excess of these reserves may be higher or we may not receive insurance proceeds in a timely manner, which may potentially have a material adverse effect on our financial conditions, results of operations or cash flows.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 20— Quarterly Financial Data (Unaudited)
+Added: Quarter Total (1)
(in millions, except per share data)
3 unchanged sentences
$ ( 190 ) $ 282 $ 313 $ 4 $ 408
−Removed: Operating income
+Added: Operating income/(loss)
$ ( 2,775 ) $ 208 $ 251 $ ( 67 ) $ ( 2,383 )
+Added: Net income/(loss)
$ ( 2,692 ) $ 137 $ 139 $ ( 23 ) $ ( 2,440 )
−Removed: Net income attributable to PAGP
+Added: Net income/(loss) attributable to PAGP
$ ( 581 ) $ 16 $ 17 $ ( 20 ) $ ( 568 )
−Removed: Basic net income per Class A share
+Added: Basic net income/(loss) per Class A share
$ ( 3.18 ) $ 0.09 $ 0.09 $ ( 0.11 ) $ ( 3.06 )
−Removed: Diluted net income per Class A share
+Added: Diluted net income/(loss) per Class A share
$ ( 3.18 ) $ 0.09 $ 0.09 $ ( 0.11 ) $ ( 3.07 )
7 unchanged sentences
$ 713 $ 449 $ 490 $ 329 $ 1,980
−Removed: Net income/(loss)
$ 914 $ 426 $ 431 $ 291 $ 2,062
−Removed: Net income/(loss) attributable to PAGP
+Added: Net income attributable to PAGP
$ 147 $ 66 $ 70 $ 48 $ 331
−Removed: Basic net income/(loss) per Class A share
+Added: Basic net income per Class A share
$ 0.92 $ 0.41 $ 0.41 $ 0.26 $ 1.97
−Removed: Diluted net income/(loss) per Class A share
+Added: Diluted net income per Class A share
$ 0.92 $ 0.40 $ 0.41 $ 0.26 $ 1.96
4 unchanged sentences
(3) Represents cash distributions declared and paid in the period presented.
+Added: The quarterly financial data in the table above includes the impact of:
+Added: • impairments of long-lived assets of $ 446 million and $ 95 million in the first and fourth quarter of 2020, respectively, as well as $ 167 million of non-cash impairments recognized upon classification to assets held for sale during the first quarter of 2020.
+Added: Such amounts are reflected in “(Gains)/losses on asset sales and asset impairments, net” in our Consolidated Statement of Operations.
+Added: See Note 6 for additional information;
+Added: • goodwill impairment losses of $ 2.515 billion in the first quarter of 2020, which is reflected in “Goodwill impairment losses” in our Consolidated Statement of Operations.
+Added: See Note 8 for additional information;
+Added: • other-than-temporary impairments of certain of our investments in unconsolidated entities of $ 69 million and $ 91 million in the second and third quarter of 2020, respectively, as well as a write-down of certain of our investments of $ 43 million in the first quarter of 2020.
+Added: The first and third quarter of 2019 include a gain on our investment in Capline LLC of $ 267 million and $ 2 million, respectively.
+Added: Such amounts are reflected in “Gain on/(impairment of) investments in unconsolidated entities, net” in our Consolidated Statements of Operations.
+Added: See Note 9 for additional information.
+Added: PLAINS GP HOLDINGS, L.P.
+Added: AND SUBSIDIARIES
+Added: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 21— Operating Segments
4 unchanged sentences
The measure of Segment Adjusted EBITDA forms the basis of our internal financial reporting and is the primary performance measure used by our CODM in assessing performance and allocating resources among our operating segments.
−Removed: We define Segment Adjusted EBITDA as revenues and equity earnings in unconsolidated entities less (a) purchases and related costs, (b) field operating costs and (c) segment general and administrative expenses, plus our proportionate share of the
−Removed: PLAINS GP HOLDINGS, L.P.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: depreciation and amortization expense of, and gains and losses on significant asset sales by, unconsolidated entities, and further adjusted for certain selected items including (i) gains and losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), gains and losses on derivatives that are related to investing activities (such as the purchase of linefill) and inventory valuation adjustments, as applicable, (ii) long-term inventory costing adjustments, (iii) charges for obligations that are expected to be settled with the issuance of equity instruments, (iv) amounts related to deficiencies associated with minimum volume commitments, net of the applicable amounts subsequently recognized into revenue and (v) other items that our CODM believes are integral to understanding our core segment operating performance.
+Added: We define Segment Adjusted EBITDA as revenues and equity earnings in unconsolidated entities less (a) purchases and related costs, (b) field operating costs and (c) segment general and administrative expenses, plus our proportionate share of the depreciation and amortization expense of unconsolidated entities, and further adjusted for certain selected items including (i) gains and losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), gains and losses on derivatives that are related to investing activities (such as the purchase of linefill) and inventory valuation adjustments, as applicable, (ii) long-term inventory costing adjustments, (iii) charges for obligations that are expected to be settled with the issuance of equity instruments, (iv) amounts related to deficiencies associated with minimum volume commitments, net of the applicable amounts subsequently recognized into revenue and (v) other items that our CODM believes are integral to understanding our core segment operating performance.
Segment Adjusted EBITDA excludes depreciation and amortization.
3 unchanged sentences
These maintenance investments are a component of field operating costs included in Segment Adjusted EBITDA or in maintenance capital, depending on the nature of the cost.
−Removed: Capital expenditures made to expand the existing operating and/or earnings capacity of our assets are classified as expansion capital.
−Removed: Capital expenditures for the replacement and/or refurbishment of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets are classified as maintenance capital, which is deducted in determining “available cash”.
−Removed: Repair and maintenance expenditures incurred in order to maintain the day to day operation of our existing assets are charged to expense as incurred.
+Added: Capital expenditures made to expand the existing operating and/or earnings capacity of our assets are classified as investment capital.
+Added: Capital expenditures for the replacement and/or refurbishment of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets are classified as maintenance capital, which is deducted in determining “available cash.” Repair and maintenance expenditures incurred in order to maintain the day to day operation of our existing assets are charged to expense as incurred.
The following tables reflect certain financial data for each segment (in millions):
10 unchanged sentences
Segment Adjusted EBITDA $ 1,616 $ 731 $ 210 $ 2,557
−Removed: Capital expenditures (3)
+Added: Investment and acquisition capital (3)
$ 981 $ 173 $ 77 $ 1,231
17 unchanged sentences
Segment Adjusted EBITDA $ 1,722 $ 705 $ 803 $ 3,230
−Removed: Capital expenditures (3)
+Added: Investment and acquisition capital (3)
$ 1,127 $ 227 $ 33 $ 1,387
14 unchanged sentences
Segment Adjusted EBITDA $ 1,508 $ 711 $ 462 $ 2,681
−Removed: Capital expenditures (3)
+Added: Investment and acquisition capital (3)
$ 1,631 $ 234 $ 23 $ 1,888
9 unchanged sentences
Intersegment activities are conducted at posted tariff rates where applicable, or otherwise at rates similar to those charged to third parties or rates that we believe approximate market at the time the agreement is executed or renegotiated.
−Removed: (3) Expenditures for acquisition capital and expansion capital, including investments in unconsolidated entities.
+Added: (3) Investment and acquisition capital expenditures, including investments in unconsolidated entities.
PLAINS GP HOLDINGS, L.P.
2 unchanged sentences
Segment Adjusted EBITDA Reconciliation
−Removed: The following table reconciles Segment Adjusted EBITDA to Net income attributable to PAGP (in millions):
+Added: The following table reconciles Segment Adjusted EBITDA to Net income/(loss) attributable to PAGP (in millions):
Year Ended December 31,
8 unchanged sentences
Long-term inventory costing adjustments (4)
+Added: ( 44 ) 20 ( 21 )
Deficiencies under minimum volume commitments, net (5)
5 unchanged sentences
Line 901 incident (8)
−Removed: ( 10 ) — ( 32 )
Significant acquisition-related expenses (9)
4 unchanged sentences
Gains/(losses) on asset sales and asset impairments, net ( 719 ) ( 28 ) 114
−Removed: Gain on investment in unconsolidated entities 271 200 —
+Added: Goodwill impairment losses ( 2,515 ) — —
+Added: Gain on/(impairment of) investments in unconsolidated entities, net ( 182 ) 271 200
Interest expense, net
1 unchanged sentence
Other income/(expense), net
−Removed: 24 ( 7 ) ( 31 )
−Removed: Income before tax
+Added: Income/(loss) before tax
( 2,607 ) 2,238 2,409
−Removed: Income tax expense
+Added: Income tax (expense)/benefit
167 ( 176 ) ( 302 )
1 unchanged sentence
( 2,440 ) 2,062 2,107
−Removed: Net income attributable to noncontrolling interests
+Added: Net (income)/loss attributable to noncontrolling interests
1,872 ( 1,731 ) ( 1,773 )
2 unchanged sentences
(1) Represents adjustments utilized by our CODM in the evaluation of segment results.
−Removed: (2) Includes our proportionate share of the depreciation and amortization of, and gains and losses on significant asset sales by, unconsolidated entities.
+Added: (2) Includes our proportionate share of the depreciation and amortization of unconsolidated entities.
(3) We use derivative instruments for risk management purposes and our related processes include specific identification of hedging instruments to an underlying hedged transaction.
6 unchanged sentences
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).
−Removed: We exclude 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 from Segment Adjusted EBITDA.
+Added: We exclude the impact of changes in the average cost of the long-term inventory (that result from fluctuations in market prices) and write-downs of such inventory that result from price declines from Segment Adjusted EBITDA.
PLAINS GP HOLDINGS, L.P.
1 unchanged sentence
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (5) We have certain agreements that require counterparties to deliver, transport or throughput a minimum volume over an agreed upon period.
+Added: (5) We, and certain of our equity method investments, 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.
8 unchanged sentences
See Note 19 for additional information regarding the Line 901 incident.
−Removed: (9) Includes acquisition-related expenses associated with the ACC Acquisition.
+Added: (9) Includes acquisition-related expenses associated with the Felix Midstream LLC acquisition.
See Note 7 for additional discussion.
15 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.