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 March 31, 2003
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No ¨
At April 30, 2003, there were outstanding 40,885,939 Common Units, 1,307,190 Class B Common Units and 10,029,619 Subordinated Units.
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
| Page | ||
| PART I. FINANCIAL INFORMATION |
||
| Item 1. CONSOLIDATED FINANCIAL STATEMENTS: |
||
| Consolidated Balance Sheets: |
||
| 3 | ||
| Consolidated Statements of Operations: |
||
| 4 | ||
| Consolidated Statements of Cash Flows: |
||
| 5 | ||
| Consolidated Statement of Partners’ Capital: |
||
| 6 | ||
| Consolidated Statements of Comprehensive Income: |
||
| 7 | ||
| Consolidated Statement of Changes in Accumulated Other Comprehensive Income: |
||
| 7 | ||
| 8 | ||
| Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
17 | |
| Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |
29 | |
| 29 | ||
| PART II. OTHER INFORMATION |
||
| 30 | ||
| 30 | ||
| 30 | ||
| 30 | ||
| 30 | ||
| 31 | ||
| 32 | ||
| 33 | ||
| 34 |
2
PART I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
(in thousands, except unit data)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash and cash equivalents |
$ |
5,277 |
|
$ |
3,501 |
| ||
| Accounts receivable, net |
|
507,184 |
|
|
499,909 |
| ||
| Inventory |
|
43,134 |
|
|
81,849 |
| ||
| Other current assets |
|
27,519 |
|
|
17,676 |
| ||
| Total current assets |
|
583,114 |
|
|
602,935 |
| ||
| PROPERTY AND EQUIPMENT |
|
1,101,512 |
|
|
1,030,303 |
| ||
| Accumulated depreciation |
|
(88,478 |
) |
|
(77,550 |
) | ||
|
|
1,013,034 |
|
|
952,753 |
| |||
| OTHER ASSETS |
||||||||
| Pipeline linefill |
|
77,316 |
|
|
62,558 |
| ||
| Other, net |
|
43,071 |
|
|
48,329 |
| ||
| Total assets |
$ |
1,716,535 |
|
$ |
1,666,575 |
| ||
| LIABILITIES AND PARTNERS’ CAPITAL |
||||||||
| CURRENT LIABILITIES |
||||||||
| Accounts payable |
$ |
510,879 |
|
$ |
488,922 |
| ||
| Due to related parties |
|
27,579 |
|
|
23,301 |
| ||
| Short-term debt |
|
19,622 |
|
|
99,249 |
| ||
| Other current liabilities |
|
29,612 |
|
|
25,777 |
| ||
| Total current liabilities |
|
587,692 |
|
|
637,249 |
| ||
| LONG-TERM LIABILITIES |
||||||||
| Long-term debt under credit facilities |
|
323,531 |
|
|
310,126 |
| ||
| Senior notes, net of unamortized discount of $380 and $390, respectively |
|
199,620 |
|
|
199,610 |
| ||
| Other long-term liabilities and deferred credits |
|
14,112 |
|
|
7,980 |
| ||
| Total liabilities |
|
1,124,955 |
|
|
1,154,965 |
| ||
| COMMITMENTS AND CONTINGENCIES (NOTE 6) |
||||||||
| PARTNERS’ CAPITAL |
||||||||
| Common unitholders (40,885,939 and 38,240,939 units outstanding at March 31, 2003, and December 31, 2002, respectively) |
|
598,642 |
|
|
524,428 |
| ||
| Class B common unitholder (1,307,190 units outstanding at each date ) |
|
18,841 |
|
|
18,463 |
| ||
| Subordinated unitholders (10,029,619 units outstanding at each date) |
|
(44,210 |
) |
|
(47,103 |
) | ||
| General partner |
|
18,307 |
|
|
15,822 |
| ||
| Total partners’ capital |
|
591,580 |
|
|
511,610 |
| ||
| $ |
1,716,535 |
|
$ |
1,666,575 |
| |||
The accompanying notes are an integral part of these consolidated financial statements.
3
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| (unaudited) |
||||||||
| REVENUES |
$ |
3,281,908 |
|
$ |
1,545,323 |
| ||
| COST OF SALES AND OPERATIONS (excluding depreciation) |
|
3,224,356 |
|
|
1,506,935 |
| ||
| Gross margin (excluding depreciation) |
|
57,552 |
|
|
38,388 |
| ||
| EXPENSES |
||||||||
| General and administrative |
|
13,072 |
|
|
10,758 |
| ||
| Depreciation-operations |
|
9,328 |
|
|
5,908 |
| ||
| Depreciation and amortization-general and administrative |
|
1,543 |
|
|
1,059 |
| ||
| Total expenses |
|
23,943 |
|
|
17,725 |
| ||
| OPERATING INCOME |
|
33,609 |
|
|
20,663 |
| ||
| OTHER INCOME/(EXPENSE) |
||||||||
| Interest expense (net of $52 and $102 capitalized, respectively) |
|
(9,154 |
) |
|
(6,453 |
) | ||
| Interest and other income (expense), net |
|
(104 |
) |
|
71 |
| ||
| NET INCOME |
$ |
24,351 |
|
$ |
14,281 |
| ||
| NET INCOME—LIMITED PARTNERS |
$ |
22,876 |
|
$ |
13,454 |
| ||
| NET INCOME—GENERAL PARTNER |
$ |
1,475 |
|
$ |
827 |
| ||
| BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT |
$ |
0.46 |
|
$ |
0.31 |
| ||
| WEIGHTED AVERAGE UNITS OUTSTANDING |
|
50,166 |
|
|
43,253 |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
4
PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| (unaudited) |
||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net income |
$ |
24,351 |
|
$ |
14,281 |
| ||
| Items not affecting cash flows from operating activities: |
||||||||
| Depreciation and amortization |
|
10,871 |
|
|
6,967 |
| ||
| Change in derivative fair value |
|
(930 |
) |
|
2,855 |
| ||
| Changes in assets and liabilities, net of acquisitions: |
||||||||
| Accounts receivable and other |
|
9,539 |
|
|
(121,581 |
) | ||
| Inventory |
|
40,114 |
|
|
37,412 |
| ||
| Pipeline linefill |
|
(13,712 |
) |
|
— |
| ||
| Accounts payable and other current liabilities |
|
16,882 |
|
|
63,219 |
| ||
| Due to related parties |
|
4,278 |
|
|
5,987 |
| ||
| Net cash provided by operating activities |
|
91,393 |
|
|
9,140 |
| ||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Cash paid in connection with acquisitions (Note 2) |
|
(44,373 |
) |
|
(13,160 |
) | ||
| Additions to property and equipment |
|
(15,077 |
) |
|
(11,398 |
) | ||
| Other investing activities |
|
543 |
|
|
26 |
| ||
| Net cash used in investing activities |
|
(58,907 |
) |
|
(24,532 |
) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||