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Partners' Capital and Distributions | 9 Months Ended
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Sep. 30, 2017
Partners' Capital Notes [Abstract] |
Partners' Capital and Distributions | Partners’ Capital and Distributions Units Outstanding The following tables present the activity for our Series A preferred units and common units:
| Limited Partners
| Preferred Units |  | Common Units
Outstanding at December 31, 2016 | 64,388,853 |  |  | 669,194,419 |
Issuances of Series A preferred units in connection with in-kind distributions | 3,941,096 |  |  | — |
Sales of common units | — |  |  | 54,119,893 |
Issuance of common units in connection with acquisition of interest in Advantage Joint Venture (Note 6) | — |  |  | 1,252,269 |
Issuances of common units under LTIP | — |  |  | 622,557 |
Outstanding at September 30, 2017 | 68,329,949 |  |  | 725,189,138 |
| Limited Partners
| Preferred Units |  | Common Units
Outstanding at December 31, 2015 | — |  |  | 397,727,624 |
Sale of Series A preferred units | 61,030,127 |  |  | — |
Issuance of Series A preferred units in connection with in-kind distribution | 2,096,204 |  |  | — |
Sales of common units | — |  |  | 9,922,733 |
Issuance of common units under LTIP | — |  |  | 457,289 |
Outstanding at September 30, 2016 | 63,126,331 |  |  | 408,107,646 |
Sales of Common Units The following table summarizes our sales of common units during the nine months ended September 30, 2017, all of which occurred in the first four months of the year (net proceeds in millions):
Type of Offering |  | Common Units Issued |  | Net Proceeds (1) |
Continuous Offering Program |  | 4,033,567 |  |  | $ | 129 |  | (2 | )
Omnibus Agreement (3) |  | 50,086,326 |  | (4 | ) | 1,535 |  |
|  | 54,119,893 |  |  | $ | 1,664 |  |
(1) | Amounts are net of costs associated with the offerings.
(2) | We pay commissions to our sales agents in connection with common units issuances under our Continuous Offering Program. We paid $1 million of such commissions during the nine months ended September 30, 2017.
(3) | Pursuant to the Omnibus Agreement entered into by the Plains Entities in connection with the Simplification Transactions, PAGP has agreed to use the net proceeds from any public or private offering and sale of Class A shares, after deducting the sales agents’ commissions and offering expenses, to purchase from AAP a number of AAP units equal to the number of Class A shares sold in such offering at a price equal to the net proceeds from such offering. The Omnibus Agreement also provides that immediately following such purchase and sale, AAP will use the net proceeds it receives from such sale of AAP units to purchase from us an equivalent number of our common units.
(4) | Includes (i) approximately 1.8 million common units issued to AAP in connection with PAGP’s issuance of Class A shares under its Continuous Offering Program and (ii) 48.3 million common units issued to AAP in connection with PAGP’s March 2017 underwritten offering.
Distributions Common Unit Distributions. During the third quarter of 2017, we engaged in discussions with the PAGP GP Board regarding a reassessment of our approach to distributions, with a focus on resetting our common unit distribution to a level supported by the distributable cash flow from our fee-based Transportation and Facilities segments. On August 25, 2017, we announced our intention to reset our annualized distribution to $1.20 per common unit, beginning with the third-quarter distribution payable November 14, 2017. On October 10, 2017, the PAGP GP Board declared a distribution of $1.20 (annualized) per common unit payable on November 14, 2017 to common unitholders of record as of October 31, 2017. The following table details the distributions paid in cash during or pertaining to the first nine months of 2017 (in millions, except per unit data):
|  | Distributions |  |  | Cash Distribution per Common Unit
|  | Common Unitholders |  | Total Cash Distribution |  |
Distribution Payment Date |  | Public |  | AAP |  |  |
November 14, 2017 (1) |  | $ | 132 |  |  | $ | 86 |  |  | $ | 218 |  |  |  | $ | 0.30 |
August 14, 2017 |  | $ | 240 |  |  | $ | 159 |  |  | $ | 399 |  |  |  | $ | 0.55 |
May 15, 2017 |  | $ | 240 |  |  | $ | 159 |  |  | $ | 399 |  |  |  | $ | 0.55 |
February 14, 2017 |  | $ | 237 |  |  | $ | 134 |  |  | $ | 371 |  |  |  | $ | 0.55 |
(1) | Payable to unitholders of record at the close of business on October 31, 2017 for the period July 1, 2017 through September 30, 2017.
Series A Preferred Unit Distributions. With respect to any quarter ending on or prior to December 31, 2017 (the “Initial Distribution Period”), we may elect to pay distributions on the Series A preferred units in additional preferred units, in cash or a combination of both. With respect to any quarter ending after the Initial Distribution Period, we must pay distributions on the Series A preferred units in cash. On February 14, 2017, we issued 1,287,773 Series A preferred units in lieu of a cash distribution of $34 million on our Series A preferred units outstanding as of the record date for such distribution. On May 15, 2017, we issued 1,313,527 Series A preferred units in lieu of a cash distribution of $34 million on our Series A preferred units outstanding as of the record date for such distribution. On August 14, 2017, we issued 1,339,796 Series A preferred units in lieu of a cash distribution of $35 million on our Series A preferred units outstanding as of the record date for such distribution. On November 14, 2017, we will issue 1,366,593 Series A preferred units in lieu of a cash distribution of $36 million on our Series A preferred units outstanding as of October 31, 2017, the record date for such distribution. Since the November 14, 2017 Series A preferred unit distribution was declared as payment-in-kind, this distribution payable was accrued to partners’ capital as of September 30, 2017 and thus had no net impact on the Series A preferred unitholders’ capital account. Issuance of Series B Preferred Units On October 10, 2017, we issued 800,000 Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in us (the “Series B preferred units”) at a price to the public of $1,000 per unit. We used the net proceeds of $788 million, after deducting the underwriters’ discounts and offering expenses, from the issuance of the Series B preferred units to repay amounts outstanding under our credit facilities and commercial paper program and for general partnership purposes. The Series B preferred units represent perpetual equity interests in us, and they have no stated maturity or mandatory redemption date and are not redeemable at the option of the holders under any circumstances. Holders of the Series B preferred units generally have no voting rights, except for limited voting rights with respect to (i) potential amendments to our partnership agreement that would have a material adverse effect on the existing preferences, rights, powers or duties of the Series B preferred units, (ii) the creation or issuance of any parity securities if the cumulative distributions payable on then outstanding Series B preferred units are in arrears, (iii) the creation or issuance of any senior securities and (iv) the payment of distributions to our common unitholders out of capital surplus. The Series B preferred units rank, as to the payment of distributions and amounts payable on a liquidation event, on par with our outstanding Series A preferred units. The Series B preferred units have a liquidation preference of $1,000 per unit. Holders of our Series B preferred units are entitled to receive, when, as and if declared by our general partner out of legally available funds for such purpose, cumulative semiannual or quarterly cash distributions, as applicable. Distributions on the Series B preferred units accrue and are cumulative from October 10, 2017, the date of original issue, and are payable semiannually in arrears on the 15th day of May and November through and including November 15, 2022, and after November 15, 2022, quarterly in arrears on the 15th day of February, May, August and November of each year. The initial distribution rate for the Series B preferred units from and including October 10, 2017 to, but not including, November 15, 2022 is 6.125% per year of the liquidation preference per unit (equal to $61.25 per unit per year). On and after November 15, 2022, distributions on the Series B preferred units will accumulate for each distribution period at a percentage of the liquidation preference equal to the then-current three-month LIBOR plus a spread of 4.11%. We will pay a pro-rated initial distribution on the Series B preferred units on November 15, 2017 to holders of record at the close of business on November 1, 2017 in an amount equal to approximately $5.9549 per unit (a total distribution of approximately $5 million). Upon the occurrence of certain rating agency events, we may redeem the Series B preferred units, in whole but not in part, at a price of $1,020 (102% of the liquidation preference) per Series B preferred unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared. In addition, at any time on or after November 15, 2022, we may redeem the Series B preferred units, at our option, in whole or in part, at a redemption price of $1,000 per Series B preferred unit plus an amount equal to all accumulated and unpaid distributions thereon to, but not including, the date of redemption, whether or not declared.

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- Definition The entire disclosure for the formation, structure, control and ownership of the partnership. Disclosures related to accounts comprising partners' capital. Includes balances of general partners' capital account, limited partners' capital account, preferred partners' capital account and total partners' capital account and units outstanding; accumulated other comprehensive income; amount and nature of changes to amount of partner's capital and units outstanding by class, rights and privileges for each class of units; distribution policies and distributions paid by unit class; impact of and correction of an error in previously issued financial statements; limitations of partners' liability; redemption, conversion and distribution policies; and deferred compensation related to the issuance of units. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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