Plains GP (US:PAGP)2021-08-05 16:00Financial Performance - The company reported a net income of $181 million for the first six months of 2021, a significant recovery from a net loss of $2.556 billion in the same period of 2020[133]. - The net loss in 2020 was primarily due to goodwill impairment losses and non-cash impairment charges totaling approximately $3.24 billion[134]. - Net income for the three months ended June 30, 2021, was $(212) million, a decrease of $(349) million or (255)% compared to $137 million in the same period of 2020[146]. - For the six months ended June 30, 2021, net income was $181 million, an increase of $2,737 million or 107% compared to a net loss of $(2,556) million in the same period of 2020[146]. Segment Performance - Transportation segment adjusted EBITDA increased by 25% to $433 million for the three months ended June 30, 2021, compared to $346 million in the same period of 2020[140]. - The Facilities segment adjusted EBITDA decreased by 20% to $140 million for the three months ended June 30, 2021, compared to $174 million in the same period of 2020[140]. - The Supply and Logistics segment adjusted EBITDA showed a significant decline of 106%, reporting a loss of $8 million for the six months ended June 30, 2021, compared to a profit of $144 million in the same period of 2020[140]. - Segment Adjusted EBITDA for the Transportation segment is evaluated based on revenues, equity earnings, and costs, with a focus on segment volumes and maintenance capital investment[148]. Revenue and Expenses - Revenues for the Transportation segment increased to $553 million for the three months ended June 30, 2021, up 21% from $457 million in 2020[153]. - Facilities segment revenues decreased by 12% to $244 million for the three months ended June 30, 2021, and by 13% to $515 million for the six months ended June 30, 2021 compared to the same periods in 2020[165]. - Revenues from the Supply and Logistics segment increased by 229% to $9,623 million for the three months ended June 30, 2021, and by 63% to $17,707 million for the six months ended June 30, 2021 compared to the same periods in 2020[171]. - The company reported a significant increase in depreciation and amortization expenses, with a $31 million increase or 19% for the three months ended June 30, 2021, compared to the same period in 2020[146]. Investments and Capital Expenditures - The company invested $142 million in midstream infrastructure projects during the first half of 2021, focusing on developments in the Permian Basin[136]. - Capital expenditures for the six months ended June 30, 2021, totaled $247 million, a decrease from $1.066 billion in the same period of 2020[187]. - Total projected investment capital for the year ended December 31, 2021, is $325 million, with a majority allocated to the Transportation and Facilities segments[188]. Asset Management and Transactions - A definitive agreement was made in July 2021 to merge Permian Basin assets with Oryx Midstream, creating a joint venture where the company will own 65%[138]. - The company completed the sale of its Pine Prairie and Southern Pines natural gas storage facilities for $850 million on August 2, 2021[139]. - Proceeds from divestitures for the first six months of 2021 were $22 million, significantly lower than $245 million in the same period of 2020[189]. - The company is focused on evaluating potential transactions to optimize its asset portfolio, including selling non-core assets or forming joint ventures[191]. Liquidity and Financial Position - The company had approximately $2.6 billion of liquidity available as of June 30, 2021, despite a working capital deficit of $485 million[183]. - The company recognized a net loss on asset sales and impairments of approximately $475 million for the six months ended June 30, 2021, primarily due to a non-cash impairment charge related to natural gas storage facilities[176]. - The company distributed all available cash to Class A shareholders within 55 days following the end of each quarter[200]. Market Risks and Management - The company is exposed to various market risks, including commodity price risk, interest rate risk, and currency exchange rate risk, and uses derivative instruments to manage these risks[220]. - The company faces risks related to competition, capacity overbuild, and negative societal sentiment regarding the hydrocarbon energy industry, which could adversely impact business[219]. - The company has a risk management function responsible for monitoring and approving risk management strategies to address market risks[220].