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Acquisitions and Dispositions
 12 Months Ended
Dec. 31, 2014
Acquisitions and Dispositions  
Acquisitions and Dispositions

Note 3—Acquisitions and Dispositions

 

2014 Acquisitions

 

Acquisition of Interest in BridgeTex Pipeline Company, LLC

 

On November 14, 2014, we acquired a 50% interest in BridgeTex Pipeline Company, LLC (“BridgeTex”) from Oxy. We account for this investment under the equity method of accounting. See Note 8 for additional discussion.

 

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.

 

Other 2014 Acquisitions

 

During the year ended December 31, 2014, we completed two additional acquisitions for aggregate consideration of $11 million. The assets acquired primarily included a crude oil terminal and a propane terminal included in our Facilities segment. We recognized goodwill of $1 million related to these acquisitions.

 

2013 Acquisitions

 

During the year ended December 31, 2013, we completed an acquisition for aggregate consideration of $19 million. The assets acquired included a trucking business included in our Transportation segment. We recognized goodwill of $6 million related to this acquisition.

 

2012 Acquisitions

 

BP NGL Acquisition

 

On April 1, 2012, we acquired all of the outstanding shares of BP Canada Energy Company, a wholly owned subsidiary of BP Corporation North America Inc. from Amoco Canada International Holdings B.V.  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.

 

The 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

 

$
241

 

N/A

 

Property and equipment

 
1,081

 

5 - 70

 

Linefill

 
85

 

N/A

 

Long-term inventory

 
165

 

N/A

 

Intangible assets (contract)

 
130

 

13

 

Goodwill

 
236

 

N/A

 

Deferred tax liability

 
(236

)

N/A

 

Environmental liability

 
(14

)

N/A

 

Other long-term liabilities

 
(5

)

N/A

 

Total

 

$
1,683

 

 

 

 

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 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 year ended December 31, 2012, we incurred $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 Consolidated Statement of Operations.

 

USD Rail Terminal Acquisition

 

On December 12, 2012, we completed a transaction with U.S. Development Group (referred to herein as the “USD Rail Terminal Acquisition”) for an aggregate consideration of $503 million, paid in cash. Through the USD Rail Terminal Acquisition, we acquired four operating crude oil rail terminals and one terminal under development. The determination of the fair value of the assets and liabilities acquired was $1 million of working capital, $76 million of property and equipment and $426 million of goodwill. The goodwill arising from the USD Rail Terminal Acquisition represents anticipated opportunities to generate future cash flows from the rail facilities by utilizing them to reduce capacity constraints in certain geographic market areas.

 

Other 2012 Acquisitions

 

During the year ended December 31, 2012, we completed several additional acquisitions for an aggregate consideration of $150 million. The assets acquired primarily included crude oil and condensate gathering pipelines, a truck unloading terminal and trailers that are utilized in our Transportation segment, and terminal facilities included in our Facilities segment. We recognized goodwill of $10 million related to these acquisitions.

 

Pro Forma Results

 

Disclosure of the revenues and earnings from the BP NGL Acquisition, USD Rail Terminal Acquisition and our other 2012 acquisitions in our results for the year ended December 31, 2012 is not practicable as they were not operated as standalone subsidiaries. Selected unaudited pro forma results of operations for the year ended December 31, 2012, assuming our 2012 acquisitions had occurred on January 1, 2012, are presented below (in millions, except per unit data):

 

 

 

Year Ended

 

 

 

December 31, 2012

 

Total revenues

 

$
38,729 

 

Net income attributable to PAA

 

$
1,149 

 

Limited partner interest in net income attributable to PAA

 

$
846 

 

Net income per limited partner unit:

 

 

 

Basic

 

$
2.57 

 

Diluted

 

$
2.55 

 

 

Dispositions

 

During 2014, 2013 and 2012, we sold various property and equipment for proceeds totaling $28 million, $200 million and $22 million, respectively. Gains of $1 million, less than $1 million and $6 million were recognized in 2014, 2013 and 2012, respectively, related to these sales.

 

Our 2013 dispositions primarily included the sale of certain refined products pipeline systems and related assets included in our Transportation segment. We closed a portion of the transaction in July 2013 and the balance in November 2013.