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Supplemental Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2011

Supplemental Condensed Consolidating Financial Information

Supplemental Condensed Consolidating Financial Information

Note 16—Supplemental Condensed Consolidating Financial Information

For purposes of the following footnote, Plains is referred to as “Parent.” See Note 13 to our Consolidated Financial Statements included in Part IV of our 2010 Annual Report on Form 10-K for further detail regarding subsidiaries classified as “Guarantor Subsidiaries” and subsidiaries classified as “Non-Guarantor Subsidiaries.” There have been no material changes in the entities that constitute our guarantor and non-guarantor subsidiaries since December 31, 2010.

The following supplemental condensed consolidating financial information reflects the Parent’s separate accounts, the combined accounts of the Guarantor Subsidiaries, the combined accounts of the Non-Guarantor Subsidiaries, the combined consolidating adjustments and eliminations and the Parent’s consolidated accounts for the dates and periods indicated. For purposes of the following condensed consolidating information, the Parent’s investments in its subsidiaries and the Guarantor Subsidiaries’ investments in their subsidiaries are accounted for under the equity method of accounting (in millions):

Condensed Consolidating Balance Sheets

		As of June 30, 2011
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Total current assets		$	2,941		$	4,890		$	469		$	(3,667	)	$	4,633
Property and equipment, net		3			5,053			2,220			—			7,276
Investments in unconsolidated entities		7,595			1,429			—			(8,829		)	195
Other assets, net		231			3,271			2,074			(2,767		)	2,809
Total assets		$	10,770		$	14,643		$	4,763		$	(15,263	)	$	14,913

LIABILITIES AND PARTNERS’ CAPITAL
Total current liabilities		$	324		$	6,814		$	512		$	(3,667	)	$	3,983
Long-term debt		4,763			1,292			1,707			(2,767		)	4,995
Other long-term liabilities		—			249			3			—			252
Total liabilities		5,087			8,355			2,222			(6,434		)	9,230

Partners’ capital excluding noncontrolling interests		5,150			6,227			2,541			(8,768		)	5,150
Noncontrolling interests		533			61			—			(61		)	533
Total partners’ capital		5,683			6,288			2,541			(8,829		)	5,683

Total liabilities and partners’ capital		$	10,770		$	14,643		$	4,763		$	(15,263	)	$	14,913

Condensed Consolidating Balance Sheets (continued)

		As of December 31, 2010
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Total current assets		$	3,460		$	4,394		$	510		$	(3,983	)	$	4,381
Property and equipment, net		2			4,870			1,819			—			6,691
Investments in unconsolidated entities		6,302			2,173			—			(8,275		)	200
Other assets, net		28			1,976			553			(126		)	2,431
Total assets		$	9,792		$	13,413		$	2,882		$	(12,384	)	$	13,703

LIABILITIES AND PARTNERS’ CAPITAL
Total current liabilities		$	853		$	6,836		$	509		$	(3,983	)	$	4,215
Long-term debt		4,366			5			386			(126		)	4,631
Other long-term liabilities		—			270			14			—			284
Total liabilities		5,219			7,111			909			(4,109		)	9,130

Partners’ capital excluding noncontrolling interests		4,342			6,241			1,973			(8,214		)	4,342
Noncontrolling interests		231			61			—			(61		)	231
Total partners’ capital		4,573			6,302			1,973			(8,275		)	4,573

Total liabilities and partners’ capital		$	9,792		$	13,413		$	2,882		$	(12,384	)	$	13,703

Condensed Consolidating Statements of Operations

		Three Months Ended June 30, 2011
		Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net operating revenues (1)		$	—		$	578		$	79		$	—		$	657
Field operating costs		—			(205		)	(18		)	—			(223		)
General and administrative expenses		—			(64		)	(9		)	—			(73		)
Depreciation and amortization		(1		)	(46		)	(16		)	—			(63		)

Operating income/(loss)		(1		)	263			36			—			298

Equity earnings in unconsolidated entities		297			23			—			(316		)	4
Interest income/(expense)		(65		)	2			1			—			(62		)
Other income/(expense), net		2			2			(2		)	—			2
Income tax expense		—			(9		)	—			—			(9		)
Net income		233			281			35			(316		)	233
Less: Net income attributable to noncontrolling interests		(8		)	(1		)	—			1			(8		)
Net income attributable to Plains		$	225		$	280		$	35		$	(315	)	$	225

		Three Months Ended June 30, 2010
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net operating revenues (1)		$	—		$	428		$	55		$	—		$	483
Field operating costs		—			(157		)	(14		)	—			(171		)
General and administrative expenses		—			(49		)	(7		)	—			(56		)
Depreciation and amortization		(1		)	(51		)	(12		)	—			(64		)

Operating income/(loss)		(1		)	171			22			—			192

Equity earnings in unconsolidated entities		196			20			—			(215		)	1
Interest income/(expense)		(62		)	3			(3		)	—			(62		)
Other income/(expense), net		—			2			—			—			2
Income tax expense		—			—			—			—			—
Net income		133			196			19			(215		)	133
Less: Net income attributable to noncontrolling interests		(2		)	—			—			—			(2		)
Net income attributable to Plains		$	131		$	196		$	19		$	(215	)	$	131

Condensed Consolidating Statements of Operations (continued)

		Six Months Ended June 30, 2011
		Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net operating revenues (1)		$	—		$	1,113		$	159		$	—		$	1,272
Field operating costs		—			(377		)	(43		)	—			(420		)
General and administrative expenses		—			(120		)	(23		)	—			(143		)
Depreciation and amortization		(3		)	(93		)	(30		)	—			(126		)

Operating income/(loss)		(3		)	523			63			—			583

Equity earnings in unconsolidated entities		573			40			—			(608		)	5
Interest income/(expense)		(133		)	6			(1		)	—			(128		)
Other income/(expense), net		(19		)	3			(4		)	—			(20		)
Income tax expense		—			(22		)	—			—			(22		)
Net income		$	418		$	550		$	58		$	(608	)	$	418
Less: Net income attributable to noncontrolling interests		(10		)	(1		)	—			1			(10		)
Net income attributable to Plains		$	408		$	549		$	58		$	(607	)	$	408

		Six Months Ended June 30, 2010
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net operating revenues (1)		$	—		$	881		$	104		$	—		$	985
Field operating costs		—			(306		)	(28		)	—			(334		)
General and administrative expenses		—			(104		)	(13		)	—			(117		)
Depreciation and amortization		(2		)	(106		)	(23		)	—			(131		)

Operating income/(loss)		(2		)	365			40			—			403

Equity earnings in unconsolidated entities		411			37			—			(446		)	2
Interest income/(expense)		(125		)	11			(6		)	—			(120		)
Other income/(expense), net		—			(1		)	—			—			(1		)
Income tax expense		—			—			—			—			—
Net income		$	284		$	412		$	34		$	(446	)	$	284
Less: Net income attributable to noncontrolling interest		(2		)	(1		)	—			1			(2		)
Net income attributable to Plains		$	282		$	411		$	34		$	(445	)	$	282

(1) Net operating revenues are calculated as “Total revenues” less “Purchases and related costs.”

Condensed Consolidating Statements of Cash Flows

		Six Months Ended June 30, 2011
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	418		$	550		$	58		$	(608	)	$	418
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization		3			93			30			—			126
Equity compensation expense		—			43			3			—			46
Gain on sale of linefill		—			(15		)	—			—			(15		)
Net cash received for terminated interest rate or foreign currency hedging instruments		12			—			—			—			12
Equity earnings in unconsolidated subsidiaries, net of distributions		(573		)	(29		)	—			608			6
Other		1			(2		)	—			—			(1		)
Changes in assets and liabilities, net of acquisitions		603			(318		)	95			—			380
Net cash provided by operating activities		464			322			186			—			972

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions, net of cash acquired		—			(7		)	(744		)	—			(751		)
Change in restricted cash		—			—			20			—			20
Additions to property, equipment and other		—			(209		)	(78		)	—			(287		)
Net cash received/(paid) for sales of linefill and base gas		—			(6		)	—			—			(6		)
Other investing activities		—			(3		)	—			—			(3		)
Net cash used in investing activities		—			(225		)	(802		)	—			(1,027		)

CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments on PAA’s revolving credit facility		(541		)	(51		)	—			—			(592		)
Net repayments on PNG’s revolving credit facility		—			—			(34		)	—			(34		)
Net repayments on PAA’s hedged inventory facility		—			(200		)	—			—			(200		)
Proceeds from the issuance of senior notes		597			—			—			—			597
Repayments of senior notes		(200		)	—			—			—			(200		)
Net proceeds from the issuance of common units		503			—			—			—			503
Cash received for sale of noncontrolling interest in a subsidiary		(230		)	—			600			—			370
Net borrowings/(repayments) on intercompany notes		(200		)	133			67			—			—
Distributions paid to common unitholders and general partner		(382		)	—			—			—			(382		)
Distributions to noncontrolling interests		—			—			(16		)	—			(16		)
Other financing activities		(5		)	2			—			—			(3		)
Net cash provided by/(used in) financing activities		(458		)	(116		)	617			—			43

Effect of translation adjustment on cash		—			(1		)	—			—			(1		)

Net increase/(decrease) in cash and cash equivalents		6			(20		)	1			—			(13		)
Cash and cash equivalents, beginning of period		(4		)	36			4			—			36
Cash and cash equivalents, end of period		$	2		$	16		$	5		$	—		$	23

Condensed Consolidating Statements of Cash Flows (continued)

		Six Months Ended June 30, 2010
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	284		$	412		$	34		$	(446	)	$	284
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization		2			106			23			—			131
Equity compensation expense		—			32			1			—			33
Equity earnings in unconsolidated subsidiaries, net of distributions		(411		)	(34		)	—			446			1
Gain on sale of linefill		—			(17		)	—			—			(17		)
Other		3			4			—			—			7
Changes in assets and liabilities, net of acquisitions		248			(199		)	(205		)	—			(156		)
Net cash provided by/(used in) operating activities		126			304			(147		)	—			283

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions		(20		)	(164		)	—			—			(184		)
Additions to property, equipment and other		—			(159		)	(56		)	—			(215		)
Net cash received/(paid) for sales of linefill and base gas		—			19			(1		)	—			18
Other investing activities		—			3			—			—			3
Net cash used in investing activities		(20		)	(301		)	(57		)	—			(378		)

CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments on PAA’s revolving credit facility		(36		)	(114		)	—			—			(150		)
Net borrowings on PNG’s revolving credit facility		—			—			205			—			205
Net borrowings on PAA’s hedged inventory facility		—			100			—			—			100
Cash received for sale of noncontrolling interest in a subsidiary		268			—			—			—			268
Distributions paid to common unitholders and general partner		(335		)	—			—			—			(335		)
Other financing activities		(2		)	—			—			—			(2		)
Net cash provided by/(used in) financing activities		(105		)	(14		)	205			—			86

Effect of translation adjustment on cash		—			(1		)	—			—			(1		)

Net increase/(decrease) in cash and cash equivalents		1			(12		)	1			—			(10		)
Cash and cash equivalents, beginning of period		1			19			5			—			25
Cash and cash equivalents, end of period		$	2		$	7		$	6		$	—		$	15

Text block that encapsulates the detailed table comprising the condensed financial statements (balance sheet, income statement and statement of cash flows), normally using the registrant (parent) as the sole domain member. If condensed consolidating financial statements are being presented, other domain members (in addition to parent) such as guarantor subsidiaries, non-guarantor subsidiaries, and the consolidation eliminations, will be included in order that the respective monetary amounts for each of the domains will aggregate to the respective amounts on the consolidated financial statements. The line items are the various captions used to compile the condensed financial statements. Using extensions, most, if not all, of the elements representing condensed financial statement captions will be the same as those used for the consolidated financial statements captions.

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