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Organization and Basis of Presentation
 12 Months Ended
Dec. 31, 2012
Organization and Basis of Presentation  
Organization and Basis of Presentation

Note 1—Organization and Basis of Presentation

 

Organization

 

Plains All American Pipeline, L.P. is a Delaware limited partnership formed in 1998. Our operations are conducted directly and indirectly through our primary operating subsidiaries. As used in this Form 10-K 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.

 

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 liquefied 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 18 for further discussion of our three operating segments.

 

Our 2% general partner interest is held by PAA GP LLC, a Delaware limited liability company, whose sole member is Plains AAP, L.P., a Delaware limited partnership. Plains All American GP LLC, a Delaware limited liability company, is Plains AAP, L.P.’s general partner. Plains All American GP LLC manages our operations and activities and employs our domestic officers and personnel. Our Canadian officers and personnel are employed by our subsidiary Plains Midstream Canada ULC. 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. Plains AAP, L.P. and Plains All American GP LLC are essentially held by 19 owners with interests ranging from approximately 35% to less than 1%.

 

Definitions

 

Additional defined terms are used in the following notes and shall have the meanings indicated below:

 

AOCI

=

Accumulated other comprehensive income

Bcf

=

Billion cubic feet

Btu

=

British thermal unit

CAD

=

Canadian dollar

CERCLA

=

Federal Comprehensive Environmental Response, Compensation and Liability Act, as amended

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

GATX

=

GATX Corporation

ICE

=

IntercontinentalExchange

IPO

=

Initial public offering

LIBOR

=

London Interbank Offered Rate

Link

=

Link Energy LLC

LLS

=

Light Louisiana Sweet

LTIP

=

Long-term incentive plan

Mcf

=

Thousand cubic feet

MLP

=

Master limited partnership

MQD

=

Minimum quarterly distribution

Nexen

=

Nexen Holdings U.S.A. Inc.

NGL

=

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

NPNS

=

Normal purchase normal sale

NYMEX

=

New York Mercantile Exchange

NYSE

=

New York Stock Exchange

PAA/Vulcan

=

PAA/Vulcan Gas Storage, LLC

Pacific

=

Pacific Energy Partners, L.P.

PLA

=

Pipeline loss allowance

PNG

=

PAA Natural Gas Storage, L.P.

PNGS

=

PAA Natural Gas Storage, LLC

Rainbow

=

Rainbow Pipe Line Company, Ltd.

RCRA

=

Federal Resource Conservation and Recovery Act, as amended

SG Resources

=

SG Resources Mississippi, LLC

SLC Pipeline

=

SLC Pipeline LLC

SOP

=

Shell Oil Products

TNM

=

Texas New Mexico

USD

=

United States dollar

Velocity

=

Velocity South Texas Gathering, LLC

White Cliffs

=

White Cliffs Pipeline, LLC

WTI

=

West Texas Intermediate

WTS

=

West Texas Sour

 

Basis of Consolidation and Presentation

 

The accompanying financial statements and related notes present and discuss our consolidated financial position as of December 31, 2012 and 2011, and the consolidated results of our operations, cash flows, changes in partners’ capital, comprehensive income and changes in accumulated other comprehensive income for the years ended December 31, 2012, 2011 and 2010. All significant intercompany transactions have been eliminated in consolidation, and certain reclassifications have been made to information from previous years to conform to the current presentation. These reclassifications do not affect net income attributable to Plains. The accompanying consolidated financial statements include Plains and all of its wholly owned subsidiaries. Investments in entities over which we have significant influence but not control are accounted for by the equity method. We evaluate our equity investments for impairment in accordance with FASB guidance with respect to the equity method of accounting for investments in common stock. 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.

 

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

 

Two-for-One Unit Split

 

In August 2012, the board of directors of our general partner approved a two-for-one split of our common units. The two-for-one split was effected on October 1, 2012, by a distribution of one additional common unit for each common unit outstanding and held by unitholders of record at the close of business on September 17, 2012 (and for each common unit issued by the Partnership during the period between September 18, 2012 and October 1, 2012). The effect of the two-for one split has been retroactively applied to all unit and per-unit amounts presented in this Form 10-K.