Plains All American Pipeline, L.P. (NYSE:PAA) and Plains GP Holdings (NYSE:PAGP) today reported second-quarter 2014 results, with PAA's results exceeding the midpoint of its quarterly guidance range by 13%.
PAA's reported results include the impact of items that affect comparability between reporting periods. The impact of certain of these items is excluded from adjusted results. See the section of this release entitled "Non-GAAP Financial Measures and Selected Items Impacting Comparability" and the tables attached hereto for information regarding certain selected items that PAA believes impact comparability of financial results between reporting periods, as well as for information regarding non-GAAP financial measures (such as adjusted EBITDA) and their reconciliation to the most directly comparable GAAP measures.
"PAA delivered solid second-quarter results, exceeding the high-end of our initial guidance range and slightly ahead of our updated outlook provided in June," stated Greg L. Armstrong, Chairman and CEO of Plains All American. "These results were driven by over performance in our Transportation and Supply and Logistics segments."
Armstrong added, "PAA remains on track to achieve its distribution growth objective of 10% for 2014, while maintaining attractive distribution coverage. PAA's quarterly distribution of $0.6450 per unit, to be paid next week, represents a 9.8% increase over the quarterly distribution paid in August 2013. Given PAA's trajectory, PAGP also remains on track to achieve its distribution growth objective of 25% for 2014. PAGP's quarterly distribution of $0.1834 per share represents a 7.5% increase over the quarterly distribution paid in May of 2014 and a 23.1% increase over the initial quarterly distribution included in PAGP's October 2013 initial public offering ("IPO") prospectus.
As a result of PAA's first half performance and our outlook for near baseline performance for the remainder of the year, we have increased our full-year adjusted EBITDA guidance by $25 million to a mid-point of $2.175 billion," said Armstrong. "Our 2014 capital expansion program is proceeding well as we continue to advance a number of attractive projects included in our multi-billion dollar project portfolio. Furthermore, we are well positioned financially, ending the second quarter with a strong balance sheet, credit metrics favorable to PAA's targeted credit profile and approximately $2.2 billion of committed liquidity."
PAA's reported results include the impact of items that affect comparability between reporting periods. The impact of certain of these items is excluded from adjusted results. See the section of this release entitled "Non-GAAP Financial Measures and Selected Items Impacting Comparability" and the tables attached hereto for information regarding certain selected items that PAA believes impact comparability of financial results between reporting periods.
Certain of our non-GAAP financial measures may not be impacted by each of the selected items impacting comparability.
Second-quarter 2014 Transportation adjusted segment profit increased 37% versus comparable 2013 results. This increase was primarily driven by higher crude oil pipeline volumes associated with recently completed organic growth projects and increased producer drilling activities, partially offset by the sale of our refined products pipelines in 2013.
Second-quarter 2014 Facilities adjusted segment profit decreased 10% over comparable 2013 results. This decrease was primarily due to the impact of recontracting capacity originally contracted at higher rates within our natural gas storage operations, as well as increased field operating costs. This impact was partially offset by increased profitability from our NGL storage and fractionation activities.
Second-quarter 2014 Supply and Logistics adjusted segment profit decreased by approximately 6% relative to comparable 2013 results. This decrease was primarily related to less favorable NGL market conditions and higher costs, primarily related to increased facility fees, in the second quarter of 2014 compared to the same 2013 period. These impacts were partially offset by more favorable crude oil market conditions during the second quarter of 2014.
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