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Organization and Basis of Presentation
 3 Months Ended
Mar. 31, 2012
Organization and Basis of Presentation  
Organization and Basis of Presentation

Note 1—Organization and Basis of Presentation

 

Organization

 

We engage in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids (“NGL”).  The term NGL includes ethane and natural gasoline products as well as propane and butane, products which are also commonly referred to as liquid petroleum gas (“LPG”).  When used in this document, NGL refers to all NGL products including LPG. Through our general partner interest and majority equity ownership position in PAA Natural Gas Storage, L.P. (NYSE: PNG), we also own and operate natural gas storage facilities. Our business activities are conducted through three operating segments: (i) Transportation, (ii) Facilities and (iii) Supply and Logistics. See Note 13 for further discussion of our three operating segments.

 

As used in this Form 10-Q and unless the context indicates otherwise, the terms “Partnership,” “Plains,” “PAA,” “we,” “us,” “our,” “ours” and similar terms refer to Plains All American Pipeline, L.P. and its subsidiaries. Also, references to our “general partner,” as the context requires, include any or all of PAA GP LLC, Plains AAP, L.P. and Plains All American GP LLC.

 

Definitions

 

Additional defined terms are used in this Form 10-Q and shall have the meanings indicated below:

 

AOCI

 

=

 

Accumulated other comprehensive income

Bcf

 

=

 

Billion cubic feet

Btu

 

=

 

British thermal unit

CAD

 

=

 

Canadian dollar

DERs

 

=

 

Distribution equivalent rights

EBITDA

 

=

 

Earnings before interest, taxes, depreciation and amortization

FASB

 

=

 

Financial Accounting Standards Board

FERC

 

=

 

Federal Energy Regulatory Commission

GAAP

 

=

 

Generally accepted accounting principles in the United States

ICE

 

=

 

IntercontinentalExchange

LIBOR

 

=

 

London Interbank Offered Rate

LLS

 

=

 

Light Louisiana Sweet

LTIP

 

=

 

Long-term incentive plan

Mcf

 

=

 

Thousand cubic feet

MLP

 

=

 

Master limited partnership

MQD

 

=

 

Minimum quarterly distribution

NGL

 

=

 

Natural gas liquids including ethane, natural gasoline products, propane and butane

NPNS

 

=

 

Normal purchases and normal sales

NYMEX

 

=

 

New York Mercantile Exchange

NYSE

 

=

 

New York Stock Exchange

PLA

 

=

 

Pipeline loss allowance

PNG

 

=

 

PAA Natural Gas Storage, L.P.

SEC

 

=

 

Securities and Exchange Commission

USD

 

=

 

United States dollar

WTI

 

=

 

West Texas Intermediate

WTS

 

=

 

West Texas Sour

 

Basis of Consolidation and Presentation

 

The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with our 2011 Annual Report on Form 10-K. The financial statements have been prepared in accordance with the instructions for interim reporting as set forth by the SEC. All adjustments (consisting only of normal recurring adjustments) that in the opinion of management were necessary for a fair statement of the results for the interim periods have been reflected. All significant intercompany transactions have been eliminated in consolidation. As discussed further below, certain reclassifications have been made to information from previous years to conform to the current presentation. The condensed balance sheet data as of December 31, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three months ended March 31, 2012 should not be taken as indicative of results to be expected for the entire year.

 

Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable.

 

Revision of Prior Period Financial Statements

 

Limited Partner and General Partner Income Allocation

 

During 2011, we identified an error in the manner in which we allocate net income to our limited partners and general partner.  Previously, we calculated net income available to limited partners based on the distribution paid during the period by first allocating the incentive distribution paid during the period to the general partner and then allocating the remaining net income based on ownership interests (98% limited partner and 2% general partner).  We have revised this allocation to utilize the distributions pertaining to the period, which are paid in the subsequent period.  This revision does not impact net income, net income attributable to Plains, net income per limited partner unit, total partners’ capital or cash flows.  We have determined that the impact of this error is not material to the previously issued financial statements.  We have presented these changes retrospectively in the condensed consolidated statement of operations, which resulted in the following changes (in millions):

 

Three Months Ended March 31, 2011

 

As
Previously
Reported

 

As
Revised

 

Net Income Attributable to Plains:

 

 

 

 

 

Limited Partners

 

$

133

 

$

129

 

General Partner

 

49

 

53

 

 

 

$

182

 

$

182