XML 79 R22.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Partners' Capital and Distributions | 12 Months Ended
--- | ---
Dec. 31, 2021
Partners' Capital Notes [Abstract] |
Partners' Capital and Distributions | Partners’ Capital and Distributions Units Outstanding At December 31, 2021, partners’ capital consisted of outstanding common units and Series A and Series B preferred units, which represent limited partner interests in us, which give the holders thereof the right to participate in distributions and to exercise the other rights or privileges as outlined in our partnership agreement. Our general partner has a non-economic interest in us. Series A Preferred Units Our Series A preferred units were issued in a private placement in 2016 at a price of $26.25 per unit (the “Issue Price”). The Series A preferred units represent limited partner interests in us, rank pari passu with our Series B preferred units, and senior to our common units and to each other class or series of our equity securities with respect to distribution rights and rights upon liquidation. The holders of the Series A preferred units receive cumulative quarterly distributions, subject to customary antidilution adjustments, equal to $0.525 per unit ($2.10 per unit annualized). The holders may convert their Series A preferred units into common units, generally on a one-for-one basis and subject to customary anti-dilution adjustments, at any time, in whole or in part, subject to certain minimum conversion amounts (and not more often than once per quarter). We may convert the Series A preferred units into common units at any time (but not more often than once per quarter), in whole or in part, subject to certain minimum conversion amounts, if the closing price of our common units is greater than 150% of the Issue Price for the preceding 20 trading days. The Series A preferred units vote on an as-converted basis with our common units and have certain other class voting rights with respect to any amendment to our partnership agreement that would adversely affect any rights, preferences or privileges of the Series A preferred units. In addition, upon certain events involving a change of control, the holders of the Series A preferred units may elect, among other potential elections, to convert the Series A preferred units into common units at the then applicable conversion rate. For a period of 30 days following (a) the fifth anniversary of the January 28, 2016 issuance date (the “Issuance Date”) of the Series A preferred units and (b) each subsequent anniversary of the Issuance Date, the holders of the Series A preferred units, acting by majority vote, may make a one-time election to reset the Series A preferred unit distribution rate to equal the then applicable rate of ten-year U.S. Treasury Securities plus 5.85% (the “Preferred Distribution Rate Reset Option”). The Preferred Distribution Rate Reset Option is accounted for as an embedded derivative. See Note 13 for additional information. If the holders of the Series A preferred units have exercised the Preferred Distribution Rate Reset Option, then, at any time following 30 days after the sixth anniversary of the Issuance Date, we may redeem all or any portion of the outstanding Series A preferred units in exchange for cash, common units (valued at 95% of the volume-weighted average price of our common units for a trading day period specified in our partnership agreement) or a combination of cash and common units at a redemption price equal to 110% of the Issue Price, plus any accrued and unpaid distributions. Series B Preferred Units Our Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in us (the “Series B preferred units”) were issued in 2017 at a price to the public of $1,000 per unit. Our 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, pari passu with our outstanding Series A preferred units and senior to our common 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 Series B Three-Month LIBOR (as defined in and calculated pursuant to our Seventh Amended and Restated Agreement of Limited Partnership) plus a spread of 4.11%. 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. The following table presents the activity for our preferred and common units:
| Limited Partners
| Series A Preferred Units |  | Series B Preferred Units |  | Common Units
Outstanding at December 31, 2018 | 71,090,468 |  |  | 800,000 |  |  | 726,361,924 |
Issuances of common units under equity-indexed compensation plans | — |  |  | — |  |  | 1,666,652 |
Outstanding at December 31, 2019 | 71,090,468 |  |  | 800,000 |  |  | 728,028,576 |
Repurchase and cancellation of common units under the Common Equity Repurchase Program | — |  |  | — |  |  | (6,222,748) |
Issuances of common units under equity-indexed compensation plans | — |  |  | — |  |  | 574,588 |
Outstanding at December 31, 2020 | 71,090,468 |  |  | 800,000 |  |  | 722,380,416 |
Repurchase and cancellation of common units under the Common Equity Repurchase Program | — |  |  | — |  |  | (18,061,583) |
Issuances of common units under equity-indexed compensation plans | — |  |  | — |  |  | 672,707 |
Outstanding at December 31, 2021 | 71,090,468 |  |  | 800,000 |  |  | 704,991,540 |
Common Equity Repurchase Program. In November 2020, the board of directors of PAGP GP approved a $500 million common equity repurchase program (the “Program”) to be utilized as an additional method of returning capital to investors. The Program authorizes the repurchase from time to time of up to $500 million of our common units and/or PAGP Class A shares via open market purchases or negotiated transactions conducted in accordance with applicable regulatory requirements. No time limit has been set for completion of the Program, and the Program may be suspended or discontinued at any time. The Program does not obligate us or PAGP to acquire a particular number of common units or PAGP Class A shares. Any common units or PAGP Class A shares that are repurchased will be canceled. PAGP Class C shares held by us associated with any publicly held common units that are repurchased will also be canceled. See Note 17 for additional information regarding our ownership of PAGP Class C shares. We repurchased 18,061,583 and 6,222,748 common units under the Program through open market purchases that settled during the years ended December 31, 2021 and 2020, respectively. The total purchase price of these units was $178 million and $50 million, respectively, including commissions and fees. The repurchased common units were canceled immediately upon acquisition, as were the PAGP Class C shares held by us associated with the repurchased common units. At December 31, 2021, the remaining available capacity under the Program was $272 million. Income Allocation We allocate net income for partners’ capital presentation purposes by applying the allocation methodology in our partnership agreement. Net income is allocated 100% to our common unitholders, after giving effect to income allocations for cash distributions to our Series A preferred unitholders and guaranteed payments attributable to our Series B preferred unitholders. In accordance with our partnership agreement, our Series A preferred unitholders are not allocated income for paid-in-kind distributions for partners’ capital presentation purposes. For purposes of determining basic and diluted net income per common unit, income is allocated as prescribed in FASB guidance for calculating earnings per unit, including a deduction to income available to common unitholders for distributions attributable to the period (whether paid in cash or in-kind) on our Series A and Series B preferred units. See Note 4 for additional information. Distributions to Unitholders In accordance with our partnership agreement, after making distributions to holders of our outstanding preferred units, we distribute the remainder of our available cash to common unitholders of record within 45 days following the end of each quarter. Available cash is generally defined as all of our cash and cash equivalents on hand at the end of each quarter, less reserves established in the discretion of our general partner for future requirements. Our available cash also includes cash on hand resulting from borrowings made after the end of the quarter. Preferred Unit Distributions The following table details distributions paid to our preferred unitholders during the years presented (in millions, except unit data):
|  | Cash Distributions
Year |  | Series A Preferred Unitholders |  |  | Series B Preferred Unitholders
2021 |  | $ | 149 |  |  |  |  |  | $ | 49 |
2020 |  | $ | 149 |  |  |  |  |  | $ | 49 |
2019 |  | $ | 149 |  |  |  |  |  | $ | 49 |
On February 14, 2022, we paid a cash distribution of $37 million to our Series A preferred unitholders. At December 31, 2021, such amount was accrued as distributions payable in “Other current liabilities” on our Consolidated Balance Sheet. At December 31, 2021, approximately $6 million of accrued distributions payable to our Series B preferred unitholders was included in “Other current liabilities” on our Consolidated Balance Sheet. Common Unit Distributions The following table details distributions paid to common unitholders during the years presented (in millions, except per unit data):
|  | Distributions Paid |  |  | Distributions per common unit
Year |  | Public |  | AAP |  | Total |  |
2021 |  | $ | 341 |  |  | $ | 176 |  |  | $ | 517 |  |  |  | $ | 0.72 |
2020 |  | $ | 432 |  |  | $ | 223 |  |  | $ | 655 |  |  |  | $ | 0.90 |
2019 |  | $ | 632 |  |  | $ | 372 |  |  | $ | 1,004 |  |  |  | $ | 1.38 |
On January 10, 2022, we declared a cash distribution of $0.18 per unit on our outstanding common units. The total distribution of $127 million was paid on February 14, 2022 to unitholders of record at the close of business on January 31, 2022, for the period from October 1, 2021 through December 31, 2021. Of this amount, approximately $43 million was paid to AAP. Noncontrolling Interests in Subsidiaries As of December 31, 2021, noncontrolling interests in our subsidiaries consisted of (i) a 35% interest in the Permian JV and (ii) a 33% interest in Red River Pipeline Company LLC (“Red River LLC”). The transactions resulting in the recognition of such noncontrolling interests are described below. In October 2021, we formed a joint venture, the Permian JV, with Oryx Midstream. We own 65% of the Permian JV and consolidate based on control, with Oryx Midstream’s 35% interest accounted for as a noncontrolling interest. This transaction resulted in the recognition of partners’ capital attributable to noncontrolling interests of approximately $2.7 billion and an increase to our partners’ capital excluding noncontrolling interests of approximately $605 million. See Note 7 for more details regarding this transaction. In May 2019, we formed a joint venture, Red River LLC, with Delek Logistics Partners, LP (“Delek”) on our Red River pipeline system. We received approximately $128 million for Delek’s 33% interest in Red River LLC. We consolidate Red River LLC based on control, with Delek’s 33% interest accounted for as a noncontrolling interest. Noncontrolling Interest Contributions and Distributions During the years ended December 31, 2021 and 2020, we received contributions from noncontrolling interests in Red River LLC of $1 million and $12 million, respectively, related to the Red River pipeline capacity expansion. During the years ended December 31, 2021, 2020 and 2019, we paid distributions of $14 million, $10 million and $6 million, respectively, to noncontrolling interests in Red River LLC. The initial distribution from the Permian JV was paid during the first quarter of 2022, with approximately $54 million paid to noncontrolling interests. Subsequent distributions will be allocated based on the MSA. See Note 7 for additional information.

X
- References No definition available. + Details
Name: | us-gaap_PartnersCapitalNotesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
Name: | us-gaap_PartnersCapitalNotesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration