Plains All American Pipeline, L.P.
) announced fourth-quarter 2012 pro forma earnings of $1.01 per
unit, beating the Zacks Consensus Estimate by 32 cents. Quarterly
earnings were 23.2% higher than the year-ago figure primarily on
strong results from the fee-based Transportation and Facilities
On a GAAP basis, the partnership reported earnings of 69 cents
per unit versus 68 cents per unit a year ago. The difference of
32 cents between pro forma and GAAP earnings was due to the
impact of certain one-time items.
These include a charge of 17 cents related to inventory
valuation adjustments from derivative activities, an asset
impairment charge of 12 cents, and another charge of 3 cents for
equity compensation expenses, loss on foreign currency
revaluation and acquisition-related costs.
The partnership's full-year 2012 earnings were $3.35 per unit,
surpassing the Zacks Consensus Estimate by 39.6%. The full-year
result was 27.9% higher than the last year's earnings.
Yearly GAAP earnings were $2.40 per unit compared with $2.44 a
year-ago. The variance between GAAP and pro forma earnings was
due to a charge of 22 cents related to inventory valuation
adjustments from derivative activities, asset impairments charge
of 49 cents, and another charge of 24 cents for loss on foreign
currency revaluation, equity compensation expenses and
Total revenue at the end of fourth quarter was $9.4 billion,
missing the Zacks Consensus Estimate by $0.9 billion. However,
quarterly revenue increased 5.6% year over year on higher revenue
generated from all three segments.
Plains All American Pipeline's full-year 2012 total revenue was
$37.8 billion, up 10.3% year over year. However, full-year
revenue fell short of the Zacks Consensus Estimate by roughly $1
Quarterly profit from this segment increased 23.8% year over year
due to higher pipeline tariffs and volumes, newly completed
organic growth projects and the benefits of the acquisition of
natural gas liquids (NGL) assets from a subsidiary of
The partnership's fourth-quarter 2012 profit rose 31.8% year over
year owing to the addition of capacity from the acquisition of
the BP NGL and numerous organic growth projects.
Supply and Logistics:
Quarterly segmental profit increased 3.5% year over year due to
proper implementation of the partnership's business model in good
crude oil market conditions and higher NGL sales volumes.
In the quarter under review, costs and expenses increased 6% year
over year to $9 billion. This was primarily due to 4.6%, 38% and
117.2% year-over-year increases in purchases and related costs,
field operating costs, and depreciation and amortization
In this quarter, positive effect from the revenue surge offset
the rise in total costs, thereby improving operating income by
12% year over year to $402 million.
Interest expenses totaled $74 million, up 17.5% year over year
primarily attributable to the rising debt level.
Cash provided by operating activities in the twelve months ending
Dec 31, 2012, was $1.2 billion versus $2.4 billion in the
year-ago comparable period.
Long-term debt as of Dec 31, 2012, was $6.3 billion versus $4.5
billion as of Dec 31, 2011.
In 2012, the partnership invested a total of $3.5 billion for its
several organic as well as inorganic growth projects.
The new quarterly distribution rate of Plains All American
Pipeline is 56.25 cents per unit and $2.25 per unit on an
annualized basis. This distribution rate reflects quarterly
growth of 3.7% and a year-over-year rise of 9.8%.
The partnership expects to benefit from strong industry
fundamentals in 2013 and share more with unitholders by
increasing the distribution rate by 9% - 10% in 2013.
In 2013, Plains All American Pipeline intends to invest $1.1
billion for its several projects.
The partnership expects its full-year 2013 adjusted earnings
before interest, tax, depreciation and amortization (EBITDA) to
be $2 billion.
Other Energy-pipeline Company Releases
Enterprise Products Partners L.P.
) reported fourth-quarter 2012 adjusted earnings per limited
partner unit of 71 cents, beating the Zacks Consensus Estimate of
El Paso Pipeline Partners, L.P.
) announced fourth-quarter 2012 operating earnings of 63 cents
per unit, surpassing the Zacks Consensus Estimate by 8 cents.
The positive effect of the acquisition of the BP assets is
evident in Plains All American's quarterly results. This
acquisition boosted the partnership's midstream business through
additional pipelines, storage capacity, fractionation plants and
supply contracts. Overall, these factors will enable the
partnership to improve its forthcoming performance.
Plains All American recorded a sound full-year 2012 with revenues
bounding across all segments. We believe the partnership is
uniquely poised to deliver attractive results riding on its
strong business model.
However, we are skeptical about stringent regulations, commodity
price volatility, and uncertainty in global capital and credit
Plains All American Pipeline currently has a Zacks Rank #3
Houston, Texas-based Plains All American Pipeline owns assets
strategically located in well-established oil producing regions,
catering to major U.S. refinery and distribution markets.
BP PLC (BP): Free Stock Analysis Report
EL PASO PIPELIN (EPB): Free Stock Analysis
ENTERPRISE PROD (EPD): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
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