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Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 

 
FORM 10-Q
 
þ
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number: 1-14569
 

 
PLAINS ALL AMERICAN PIPELINE, L.P.
(Exact name of registrant as specified in its charter)
 
Delaware
    
76-0582150
(State or other jurisdiction of
incorporation or organization)
    
(I.R.S. Employer
Identification No.)
 
333 Clay Street, Suite 1600
Houston, Texas 77002
(Address of principal executive offices)
(Zip Code)
 
(713) 646-4100
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
 
At November 4, 2002, there were outstanding 38,240,939 Common Units, 1,307,190 Class B Common Units and 10,029,619 Subordinated Units.
 


Table of Contents
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
 
TABLE OF CONTENTS
 
    
Page

PART I. FINANCIAL INFORMATION
    
Item 1. CONSOLIDATED FINANCIAL STATEMENTS:
    
    
September 30, 2002, and December 31, 2001
  
3
    
For the three and nine months ended September 30, 2002 and 2001
  
4
    
For the nine months ended September 30, 2002 and 2001
  
5
    
For the nine months ended September 30, 2002
  
6
    
For the three and nine months ended September 30, 2002 and 2001
  
7
    
For the nine months ended September 30, 2002
  
7
  
8
  
17
  
30
  
30
PART II. OTHER INFORMATION
    
  
31
  
31
  
31
  
31
  
31
  
31
  
33
  
34
  
35
 

2


Table of Contents
PART I. FINANCIAL INFORMATION
 
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
 
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
    
September 30, 2002

    
December 31, 2001

 
    
(unaudited)
        
ASSETS
             
CURRENT ASSETS
                 
Cash and cash equivalents
  
$
4,306
 
  
$
3,511
 
Accounts receivable and other current assets
  
 
496,857
 
  
 
365,697
 
Inventory
  
 
81,189
 
  
 
188,874
 
    


  


Total current assets
  
 
582,352
 
  
 
558,082
 
    


  


PROPERTY AND EQUIPMENT
  
 
1,012,814
 
  
 
653,050
 
Less allowance for depreciation and amortization
  
 
(67,900
)
  
 
(48,131
)
    


  


    
 
944,914
 
  
 
604,919
 
    


  


OTHER ASSETS
                 
Pipeline linefill
  
 
51,416
 
  
 
57,367
 
Other, net
  
 
52,808
 
  
 
40,883
 
    


  


    
 
104,224
 
  
 
98,250
 
    


  


    
$
1,631,490
 
  
$
1,261,251
 
    


  


LIABILITIES AND PARTNERS’ CAPITAL
             
CURRENT LIABILITIES
                 
Accounts payable and other current liabilities
  
$
468,988
 
  
$
386,993
 
Due to related parties
  
 
25,580
 
  
 
13,685
 
Short-term debt
  
 
105,577
 
  
 
101,482
 
    


  


Total current liabilities
  
 
600,145
 
  
 
502,160
 
LONG-TERM LIABILITIES
                 
Long-term debt under credit facilities
  
 
309,453
 
  
 
354,677
 
Senior notes, net of unamortized discount of $400
  
 
199,600
 
  
 
—  
 
Other long-term liabilities and deferred credits
  
 
4,317
 
  
 
1,617
 
    


  


Total liabilities
  
 
1,113,515
 
  
 
858,454
 
    


  


COMMITMENTS AND CONTINGENCIES (NOTE 8)
                 
PARTNERS’ CAPITAL
                 
Common unitholders (38,240,939 and 31,915,939 units outstanding at September 30, 2002, and December 31, 2001, respectively)
  
 
529,488
 
  
 
408,562
 
Class B common unitholders (1,307,190 units outstanding at each date )
  
 
18,621
 
  
 
19,534
 
Subordinated unitholders (10,029,619 units outstanding at each date)
  
 
(45,900
)
  
 
(38,891
)
General partner
  
 
15,766
 
  
 
13,592
 
    


  


Total partners’ capital
  
 
517,975
 
  
 
402,797
 
    


  


    
$
1,631,490
 
  
$
1,261,251
 
    


  


 
The accompanying notes are an integral part of these consolidated financial statements.
 

3


Table of Contents
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(in thousands, except per unit data)
 
    
Three Months Ended September 30,

    
Nine Months Ended September 30,

 
    
2002

    
2001

    
2002

    
2001

 
    
(unaudited)
 
REVENUES
  
$
2,344,089
 
  
$
2,191,310
 
  
$
5,874,759
 
  
$
5,298,051
 
COST OF SALES AND OPERATIONS
  
 
2,299,823
 
  
 
2,151,666
 
  
 
5,750,398
 
  
 
5,189,288
 
    


  


  


  


Gross Margin
  
 
44,266
 
  
 
39,644
 
  
 
124,361
 
  
 
108,763
 
    


  


  


  


EXPENSES
                                   
General and administrative
  
 
11,512
 
  
 
10,297
 
  
 
33,389
 
  
 
34,327
 
Depreciation and amortization
  
 
8,981
 
  
 
6,402
 
  
 
23,125
 
  
 
17,575
 
    


  


  


  


Total expenses
  
 
20,493
 
  
 
16,699
 
  
 
56,514
 
  
 
51,902
 
    


  


  


  


OPERATING INCOME
  
 
23,773
 
  
 
22,945
 
  
 
67,847
 
  
 
56,861
 
Interest expense
  
 
(7,368
)
  
 
(7,775
)
  
 
(20,175
)
  
 
(22,482
)
Interest and other income (expense)
  
 
(88
)
  
 
(9
)
  
 
(123
)
  
 
356
 
    


  


  


  


Income before cumulative effect of accounting change
  
 
16,317
 
  
 
15,161
 
  
 
47,549
 
  
 
34,735
 
Cumulative effect of accounting change
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
508
 
    


  


  


  


NET INCOME
  
$
16,317
 
  
$
15,161
 
  
$
47,549
 
  
$
35,243
 
    


  


  


  


NET INCOME—LIMITED PARTNERS
  
$
15,159
 
  
$
14,536
 
  
$
44,515
 
  
$
34,019
 
    


  


  


  


NET INCOME—GENERAL PARTNER
  
$
1,158
 
  
$
625
 
  
$
3,034
 
  
$
1,224
 
    


  


  


  


BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT
                                   
Income before cumulative effect of accounting change
  
$
0.33
 
  
$
0.38
 
  
$
1.01
 
  
$
0.93
 
Cumulative effect of accounting change
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
0.01
 
    


  


  


  


Net income
  
$
0.33
 
  
$
0.38
 
  
$
1.01
 
  
$
0.94
 
    


  


  


  


WEIGHTED AVERAGE UNITS OUTSTANDING
  
 
46,027
 
  
 
38,353
 
  
 
44,188
 
  
 
36,156
 
    


  


  


  


 
 
The accompanying notes are an integral part of these consolidated financial statements.
 

4


Table of Contents
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
    
Nine Months Ended September 30,

 
    
2002

    
2001

 
    
(unaudited)
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net income
  
$
47,549
 
  
$
35,243
 
Adjustments to reconcile net income to net cash provided by operating activities:
                 
Depreciation and amortization
  
 
23,125
 
  
 
17,575
 
Cumulative effect of accounting change
  
 
—  
 
  
 
(508
)
Change in derivative fair value
  
 
2,130
 
  
 
(774
)
Noncash compensation expense
  
 
—  
 
  
 
5,741
 
Change in assets and liabilities, net of assets acquired and liabilities assumed:
                 
Accounts receivable and other current assets
  
 
(129,930
)
  
 
(189,490
)
Inventory
  
 
104,664
 
  
 
(8,037
)
Accounts payable and other current liabilities
  
 
67,954
 
  
 
149,408
 
Due to re