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Acquisitions | 6 Months Ended
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Jun. 30, 2012
Acquisitions |
Acquisitions |
Note 4—Acquisitions The following acquisitions were accounted for using the acquisition method of accounting and the determination of the fair value of the assets and liabilities acquired has been estimated in accordance with the applicable accounting guidance. BP NGL Acquisition On April 1, 2012, we acquired all of the outstanding shares of BP Canada Energy Company (“BPCEC”), a wholly owned subsidiary of BP Corporation North America Inc. (“BP North America”) from Amoco Canada International Holdings B.V. (the “Seller”). Total consideration for this acquisition (referred to herein as the “BP NGL Acquisition”), which was based on an October 1, 2011 effective date, was approximately $1.68 billion in cash, including $17 million of imputed interest, subject to working capital and other adjustments. Upon completion of this acquisition, we became the indirect owner of all of BP North America’s Canadian-based NGL business and certain of BP North America’s NGL assets located in the upper-Midwest United States (collectively the “BP NGL Assets”). The BP NGL Assets acquired include varying ownership interests and contractual rights relating to approximately 2,600 miles of NGL pipelines; approximately 20 million barrels of NGL storage capacity; seven fractionation plants with an aggregate net capacity of approximately 232,000 barrels per day; four straddle plants and two field gas processing plants with an aggregate net capacity of approximately six Bcf per day; and long-term and seasonal NGL inventories of approximately 8 million barrels upon closing. Certain of these pipelines and storage assets are currently inactive. The acquired business also includes various third-party supply contracts at other field gas processing plants and a supply contract relating to a third-party owned straddle plant with throughput capacity of 2.5 Bcf per day, shipping arrangements on third-party NGL pipelines and long-term leases on 720 rail cars used to move product among various locations. We have also entered into an Integrated Supply and Trading Agreement, pursuant to which an affiliate of BP North America will, for a period of two years following the closing of the acquisition, continue to provide sourcing services for gas supply to feed certain of the straddle plants acquired as a result of the acquisition. The preliminary determination of the fair value of the assets and liabilities acquired is as follows (in millions):
|  |  |  | Average |
|  |  |  | Depreciable |
Description |  | Amount |  | Life (in years) |
Working capital |  | $ | 253 |  | N/A |
Property and equipment |  | 1,067 |  | 5 - 70 |
Linefill |  | 84 |  | N/A |
Long-term inventory |  | 166 |  | N/A |
Intangible assets (contract) |  | 132 |  | 14 |
Goodwill |  | 244 |  | N/A |
Deferred tax liability |  | (244 | ) | N/A |
Environmental liability |  | (14 | ) | N/A |
Other long-term liabilities |  | (5 | ) | N/A |
Total |  | $ | 1,683 |  |  |
The determination of the fair value of the assets and liabilities acquired is preliminary pending completion of internal valuation procedures and resolution of working capital and other adjustments. We expect to finalize our fair value determination during 2012. The purchase price was equal to the fair value of the net tangible and intangible assets acquired, excluding the resulting deferred tax liability and goodwill. The deferred tax liability is determined by the difference between the fair value of the acquired assets and liabilities and the tax basis for those assets and liabilities. The resulting liability gives rise to an equal and offsetting goodwill balance for this transaction. The preliminary determination of fair value to intangible assets above is comprised of a contract with a 14 year life. Amortization of the contract under the declining balance method of amortization for the five full or partial calendar years following the acquisition date is estimated as follows:
2012 (1) |  | $ | 39 |
2013 |  | $ | 30 |
2014 |  | $ | 10 |
2015 |  | $ | 8 |
2016 |  | $ | 7 |
2017 |  | $ | 6 |
(1) Estimated amortization is for the period of April 1, 2012 through December 31, 2012. The following table reflects the preliminary determination of total assets and total net assets by segment as a result of the BP NGL Acquisition (in millions):
|  | Total |  | Total |
|  | Assets |  | Net Assets |
Transportation |  | $ | 558 |  | $ | 398 |
Facilities |  | 1,067 |  | 787 |
Supply and Logistics |  | 845 |  | 498 |
Total |  | $ | 2,470 |  | $ | 1,683 |
The BP NGL Acquisition was pre-funded through various means, including the issuance of common units and senior notes in March 2012 for net proceeds of approximately $1.69 billion. During the six months ended June 30, 2012, we incurred approximately $13 million of acquisition-related costs associated with the BP NGL Acquisition. Such costs are reflected as a component of general and administrative expenses in our condensed consolidated statement of operations. Pro Forma Results Disclosure of the revenues and earnings from the BP NGL Acquisition in our results for the three and six months ended June 30, 2012 is not practicable as it is not being operated as a standalone subsidiary. Selected unaudited pro forma results of operations for the three and six months ended June 30, 2012 and 2011, assuming the BP NGL Acquisition had occurred on January 1, 2011, are presented below (in millions, except per unit amounts):
|  | Three Months Ended |  | Six Months Ended |
|  | June 30, |  | June 30, |
|  | 2012 |  | 2011 |  | 2012 |  | 2011 |
Total revenues |  | $ | 9,786 |  | $ | 9,937 |  | $ | 19,828 |  | $ | 18,541 |
Net income attributable to Plains |  | $ | 378 |  | $ | 239 |  | $ | 600 |  | $ | 498 |
Limited partner interest in net income attributable to Plains |  | $ | 303 |  | $ | 186 |  | $ | 460 |  | $ | 394 |
Net income per limited partner unit: |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.86 |  | $ | 1.20 |  | $ | 2.83 |  | $ | 2.60 |
Diluted |  | $ | 1.85 |  | $ | 1.20 |  | $ | 2.81 |  | $ | 2.58 |
Other Acquisitions During the six months ended June 30, 2012, we completed three additional acquisitions for an aggregate consideration of approximately $22 million. The assets acquired primarily included trailers that are utilized in our transportation segment and terminal facilities included in our facilities segment. We recognized goodwill of approximately $10 million related to these acquisitions.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1490-128463 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1486-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1500-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph 67-73 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph F4 -Subparagraph e -Appendix F Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1497-128463 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 88-16 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51, 52 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 + Details
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