Net Income Per Limited Partner Unit (Tables)

9 Months Ended

Sep. 30, 2014

Computation of basic and diluted net income per limited partner unit

The following table sets forth the computation of basic and diluted net income per limited partner unit for the three and nine months ended September 30, 2014 and 2013 (in millions, except per unit data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Basic Net Income per Limited Partner Unit
Net income attributable to PAA	$	323		$	231		$	994		$	1,052
Less: General partner’s incentive distribution (1)	(124		)	(95		)	(351		)	(272		)
Less: General partner 2% ownership (1)	(4		)	(3		)	(13		)	(16		)
Net income available to limited partners	195			133			630			764
Less: Undistributed earnings allocated and distributions to participating securities (1)	(1		)	(1		)	(5		)	(5		)
Net income available to limited partners in accordance with application of the two-class method for MLPs	$	194		$	132		$	625		$	759

Basic weighted average limited partner units outstanding	370			343			365			340

Basic net income per limited partner unit	$	0.52		$	0.38		$	1.71		$	2.23

Diluted Net Income per Limited Partner Unit
Net income attributable to PAA	$	323		$	231		$	994		$	1,052
Less: General partner’s incentive distribution (1)	(124		)	(95		)	(351		)	(272		)
Less: General partner 2% ownership (1)	(4		)	(3		)	(13		)	(16		)
Net income available to limited partners	195			133			630			764
Less: Undistributed earnings allocated and distributions to participating securities (1)	(1		)	(1		)	(5		)	(4		)
Net income available to limited partners in accordance with application of the two-class method for MLPs	$	194		$	132		$	625		$	760

Basic weighted average limited partner units outstanding	370			343			365			340
Effect of dilutive securities: Weighted average LTIP units	1			2			2			2
Diluted weighted average limited partner units outstanding	371			345			367			342

Diluted net income per limited partner unit	$	0.52		$	0.38		$	1.70		$	2.22

(1) We calculate net income available to limited partners based on the distributions pertaining to the current period’s net income. After adjusting for the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to the general partner, limited partners and participating securities in accordance with the contractual terms of the partnership agreement and as further prescribed under the two-class method.

Undistributed earnings allocation to IDRs impact on basic and diluted net income per limited partner unit

	Three Months Ended September 30 ,				Nine Months Ended September 30,
	2014		2013		2014		2013
Basic net income per limited partner unit impact	$	—	$	—	$	—	$	(0.23	)

Diluted net income per limited partner unit impact	$	—	$	—	$	—	$	(0.23	)