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Plains All American Pipeline Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 1, 2004
Period End
December 31, 2003
Securities
PAAPAAPU
In the record · 2016–202610-K1110-Q328-K168

PAA filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 168 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Aug ’17Aug ’17
  2. Leadership change8-K · Sep ’19Sep ’19
  3. Deal closed8-K · Oct ’21Oct ’21
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 1, 2004. Cited figures are marked; the original filing is the authoritative source.

Plains All American Pipeline, L.P. reported its 2003 Form 10-K, filed with total revenues of $12.59 billiona and net income of $59.4 million for the year ended December 31, 2003, compared with $65.3 million in 2002 and $44.2 million in 2001.

The Partnership operates roughly 7,000 miles of crude oil pipelines in the United States and Canada and owns about 24.0 million barrels of terminalling and storage capacity, including the Cushing Terminal at the Cushing Interchange. Net income was reduced by a $28.8 millionb Long-Term Incentive Plan charge, and the Partnership completed ten acquisitions in 2003 for about $159.5 million. The Partnership remained within its targeted credit profile at December 31, 2003, and Moody's and Standard & Poor's raised its senior unsecured ratings during 2003 (Ba1 and BBB-, respectively).

Liquidity was supported by $750 millionc of new senior unsecured credit facilities, a $200 million uncommitted hedged inventory facility, and $250 million of 5.625% senior notes issued in December 2003. At year end the Partnership had a working capital deficit of $68.9 million and about $596.8 million of unused committed credit facility capacity.

The filing highlights a pending acquisition of interests in the Capline and Capwood pipeline systems from Shell Pipeline Company for approximately $158 milliond, expected to close in the first quarter of 2004, and an advanced negotiation for other assets priced at $300 million to $400 million. Risks disclosed include declining production from offshore California fields that feed the All American Pipeline, an Export Administration Regulations matter with the Bureau of Industry and Security for which no penalty estimate exists, and a putative class action in Delaware related to the proposed buyout of Plains Resources Inc.

02—Key points

Key Highlights

  1. Total revenues of $12,589.8 million in 2003, up from $8,384.2 million in 2002, while net income was $59.4 million versus $65.3 million.
  2. Long-Term Incentive Plan charge of $28.8 million in 2003 reduced results; the filing reports total items impacting comparability of $(31.7) million for 2003.
  3. Ten acquisitions completed in 2003 for aggregate consideration of about $159.5 million, including the South Saskatchewan Pipeline System (about $47.7 million) and the ArkLaTex Pipeline System.
  4. Pending acquisition of Shell Pipeline's interests in the Capline and Capwood pipelines for about $158 million, expected to close in the first quarter of 2004 with no assurance of timing.
  5. Total long-term debt of $519.0 million and total debt of $646.2 million at December 31, 2003; partners' capital of $746.7 million.
  6. Available liquidity included about $596.8 million unused committed credit capacity and about $100 million under the hedged inventory facility at year end.
  7. Cash distribution of $0.5625 per unit paid in February 2004; subordinated units converted to common units in February 2004.

03—Questions

Frequently Asked Questions

  1. How did Plains All American Pipeline perform financially in 2003?

    Total revenues rose to $12,589.8 million from $8,384.2 million, but net income declined to $59.4 million from $65.3 million. Operating income was $98.2 million, compared with $94.6 million in 2002. The filing attributes the net income decline partly to a $28.8 million LTIP charge.

  2. What assets does the Partnership operate?

    The Partnership owns and operates about 7,000 miles of gathering and mainline crude oil pipelines in the United States and Canada and about 24.0 million barrels of above-ground terminalling and storage capacity. The Cushing Terminal at the Cushing Interchange has a capacity of 5.3 million barrels.

  3. What acquisitions are pending?

    The Partnership agreed on December 16, 2003 to acquire Shell Pipeline Company's interests in the Capline and Capwood pipeline systems for approximately $158 million, expected to close in the first quarter of 2004. The filing also discloses advanced discussions on other assets priced at $300 million to $400 million, subject to due diligence and approvals.

  4. What are the main risks identified in the filing?

    Key risks include natural production declines from offshore California fields shipped on the All American Pipeline, dependence on third-party shipper volumes, competition, environmental liabilities not covered by indemnities or insurance, and an unresolved Export Administration Regulations matter with the Bureau of Industry and Security for which the Partnership cannot estimate the impact.

04—Continue

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