Net Income Per Limited Partner Unit (Tables)

3 Months Ended

Mar. 31, 2015

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 months ended March 31, 2015 and 2014 (in millions, except per unit data):

	Three Months Ended March 31,
	2015			2014
Basic Net Income per Limited Partner Unit
Net income attributable to PAA	$	283		$	384
Less: General partner’s incentive distribution (1)	(142		)	(110		)
Less: General partner 2% ownership (1)	(3		)	(6		)
Net income available to limited partners	138			268
Less: Undistributed earnings allocated and distributions to participating securities (1)	(2		)	(2		)
Net income available to limited partners in accordance with application of the two-class method for MLPs	$	136		$	266

Basic weighted average limited partner units outstanding	383			360

Basic net income per limited partner unit	$	0.36		$	0.74

Diluted Net Income per Limited Partner Unit
Net income attributable to PAA	$	283		$	384
Less: General partner’s incentive distribution (1)	(142		)	(110		)
Less: General partner 2% ownership (1)	(3		)	(6		)
Net income available to limited partners	138			268
Less: Undistributed earnings allocated and distributions to participating securities (1)	(2		)	(2		)
Net income available to limited partners in accordance with application of the two-class method for MLPs	$	136		$	266

Basic weighted average limited partner units outstanding	383			360
Effect of dilutive securities: Weighted average LTIP units	2			3
Diluted weighted average limited partner units outstanding	385			363

Diluted net income per limited partner unit	$	0.35		$	0.73

(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
	March 31,
	2015		2014
Basic net income per limited partner unit impact	$	—	$	(0.05	)

Diluted net income per limited partner unit impact	$	—	$	(0.05	)