PLAINS ALL AMERICAN PIPELINE LP [PAA] Filings

10-Q 1 paa-20210930.htm 10-Q paa-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________

FORM 10-Q

________________________________________________________________________________________________________________________________

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ 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)

________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units	PAA	Nasdaq

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of October 29, 2021, there were 711,121,882 Common Units outstanding.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets: As of September 30, 2021 and December 31, 2020			3
Condensed Consolidated Statements of Operations: For the three and nine months ended September 30, 2021 and 2020			4
Condensed Consolidated Statements of Comprehensive Income/(Loss): For the three and nine months ended September 30, 2021 and 2020			5
Condensed Consolidated Statements of Changes in Accumulated Other Comprehensive Income/(Loss): For the nine months ended September 30, 2021 and 2020			5
Condensed Consolidated Statements of Cash Flows: For the nine months ended September 30, 2021 and 2020			6
Condensed Consolidated Statements of Changes in Partners’ Capital: For the three and nine months ended September 30, 2021 and 2020			7
Notes to the Condensed Consolidated Financial Statements:
1. Organization and Basis of Consolidation and Presentation			9
2. Summary of Significant Accounting Policies			11
3. Revenues and Accounts Receivable			12
4. Net Income/(Loss) Per Common Unit			16
5. Inventory, Linefill and Base Gas and Long-term Inventory			17
6. Debt			18
7. Partners’ Capital and Distributions			20
8. Derivatives and Risk Management Activities			22
9. Related Party Transactions			27
10. Commitments and Contingencies			28
11. Operating Segments			32
12. Acquisitions, Divestitures and Other Transactions			36

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			37
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			61
Item 4. CONTROLS AND PROCEDURES			62

PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS			63
Item 1A. RISK FACTORS			63
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			63
Item 3. DEFAULTS UPON SENIOR SECURITIES			64
Item 4. MINE SAFETY DISCLOSURES			64
Item 5. OTHER INFORMATION			64
Item 6. EXHIBITS			64
SIGNATURES			68

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except unit data)


	September 30, 2021		December 31, 2020
	(unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	191	$	22
Restricted cash	3		38
Trade accounts receivable and other receivables, net	3,765		2,553
Inventory	681		647
Other current assets	234		405
Total current assets	4,874		3,665

PROPERTY AND EQUIPMENT	17,283		18,585
Accumulated depreciation	(4,199)		(3,974)
Property and equipment, net	13,084		14,611

OTHER ASSETS
Investments in unconsolidated entities	3,710		3,764
Linefill and base gas	901		982
Long-term operating lease right-of-use assets, net	374		378
Long-term inventory	221		130
Other long-term assets, net	1,033		967
Total assets	$	24,197	$	24,497

LIABILITIES AND PARTNERS’ CAPITAL

CURRENT LIABILITIES
Trade accounts payable	$	3,873	$	2,437
Short-term debt	808		831
Other current liabilities	716		985
Total current liabilities	5,397		4,253

LONG-TERM LIABILITIES
Senior notes, net	8,327		9,071
Other long-term debt, net	61		311
Long-term operating lease liabilities	326		317
Other long-term liabilities and deferred credits	789		807
Total long-term liabilities	9,503		10,506

COMMITMENTS AND CONTINGENCIES (NOTE 10)

PARTNERS’ CAPITAL
Series A preferred unitholders (71,090,468 and 71,090,468 units outstanding, respectively)	1,505		1,505
Series B preferred unitholders (800,000 and 800,000 units outstanding, respectively)	787		787
Common unitholders (711,121,882 and 722,380,416 units outstanding, respectively)	6,860		7,301
Total partners’ capital excluding noncontrolling interests	9,152		9,593
Noncontrolling interests	145		145
Total partners’ capital	9,297		9,738
Total liabilities and partners’ capital	$	24,197	$	24,497

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per unit data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(unaudited)				(unaudited)
REVENUES
Supply and Logistics segment revenues	$	10,515	$	5,537	$	28,221	$	16,370
Transportation segment revenues	133		146		432		484
Facilities segment revenues	128		150		436		473
Total revenues	10,776		5,833		29,089		17,327

COSTS AND EXPENSES
Purchases and related costs	10,074		5,107		26,743		15,000
Field operating costs	274		254		746		811
General and administrative expenses	67		61		205		201
Depreciation and amortization	178		160		551		493
(Gains)/losses on asset sales and asset impairments, net	221		(2)		592		617
Goodwill impairment losses	—		—		—		2,515
Total costs and expenses	10,814		5,580		28,837		19,637

OPERATING INCOME/(LOSS)	(38)		253		252		(2,310)

OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities	69		89		190		280
Gain on/(impairment of) investments in unconsolidated entities, net	—		(91)		—		(182)
Interest expense (net of capitalized interest of $4, $6, $14 and $17, respectively)	(106)		(113)		(319)		(329)
Other income/(expense), net	(10)		5		13		(7)

INCOME/(LOSS) BEFORE TAX	(85)		143		136		(2,548)
Current income tax expense	(8)		(17)		(11)		(39)
Deferred income tax benefit	38		20		27		32

NET INCOME/(LOSS)	(55)		146		152		(2,555)
Net income attributable to noncontrolling interests	(4)		(3)		(9)		(7)
NET INCOME/(LOSS) ATTRIBUTABLE TO PAA	$	(59)	$	143	$	143	$	(2,562)

NET INCOME/(LOSS) PER COMMON UNIT (NOTE 4):
Net income/(loss) allocated to common unitholders — Basic and Diluted	$	(109)	$	93	$	(7)	$	(2,712)
Basic and diluted weighted average common units outstanding	715		728		719		728
Basic and diluted net income/(loss) per common unit	$	(0.15)	$	0.13	$	(0.01)	$	(3.72)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(unaudited)				(unaudited)
Net income/(loss)	$	(55)	$	146	$	152	$	(2,555)
Other comprehensive income/(loss)	(44)		82		64		(129)
Comprehensive income/(loss)	(99)		228		216		(2,684)
Comprehensive income attributable to noncontrolling interests	(4)		(3)		(9)		(7)
Comprehensive income/(loss) attributable to PAA	$	(103)	$	225	$	207	$	(2,691)

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

(in millions)


	Derivative Instruments		Translation Adjustments		Other		Total
	(unaudited)
Balance at December 31, 2020	$	(258)	$	(657)	$	(3)	$	(918)

Reclassification adjustments	28		—		—		28
Unrealized gain on hedges	36		—		—		36
Currency translation adjustments	—		1		—		1
Other	—		—		(1)		(1)
Total period activity	64		1		(1)		64
Balance at September 30, 2021	$	(194)	$	(656)	$	(4)	$	(854)


	Derivative Instruments		Translation Adjustments		Other		Total
	(unaudited)
Balance at December 31, 2019	$	(259)	$	(674)	$	—	$	(933)

Reclassification adjustments	8		—		—		8
Unrealized loss on hedges	(39)		—		—		(39)
Currency translation adjustments	—		(99)		—		(99)
Other	—		—		1		1
Total period activity	(31)		(99)		1		(129)
Balance at September 30, 2020	$	(290)	$	(773)	$	1	$	(1,062)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Nine Months Ended September 30,
	2021		2020
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss)	$	152	$	(2,555)
Reconciliation of net income/(loss) to net cash provided by operating activities:
Depreciation and amortization	551		493
(Gains)/losses on asset sales and asset impairments, net	592		617
Goodwill impairment losses	—		2,515

Inventory valuation adjustments	—		233
Deferred income tax benefit	(27)		(32)

Settlement of terminated interest rate hedging instruments	—		(100)
Change in fair value of Preferred Distribution Rate Reset Option (Note 8)	(13)		(7)
Equity earnings in unconsolidated entities	(190)		(280)
Distributions on earnings from unconsolidated entities	322		344
(Gain on)/impairment of investments in unconsolidated entities, net	—		182
Other	42		37
Changes in assets and liabilities, net of acquisitions	(68)		(191)
Net cash provided by operating activities	1,361		1,256

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions, net of cash acquired	(32)		(310)
Investments in unconsolidated entities	(78)		(386)
Additions to property, equipment and other	(257)		(606)
Proceeds from sales of assets	878		246



Other investing activities	(33)		(10)
Net cash provided by/(used in) investing activities	478		(1,066)

CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings/(repayments) under commercial paper program (Note 6)	(546)		19

Net repayments under senior secured hedged inventory facility (Note 6)	(167)		(325)
Repayment of GO Zone term loans (Note 6)	(200)		—
Proceeds from the issuance of senior notes	—		748
Repayments of senior notes	—		(17)

Repurchase of common units (Note 7)	(117)		—
Distributions paid to Series A preferred unitholders (Note 7)	(112)		(112)
Distributions paid to Series B preferred unitholders (Note 7)	(25)		(25)
Distributions paid to common unitholders (Note 7)	(389)		(524)



Other financing activities	(151)		19
Net cash used in financing activities	(1,707)		(217)

Effect of translation adjustment	2		(9)

Net increase/(decrease) in cash and cash equivalents and restricted cash	134		(36)
Cash and cash equivalents and restricted cash, beginning of period	60		82
Cash and cash equivalents and restricted cash, end of period	$	194	$	46

Cash paid for:
Interest, net of amounts capitalized	$	265	$	285
Income taxes, net of amounts refunded	$	32	$	72

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(in millions)


	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at December 31, 2020	$	1,505	$	787	$	7,301	$	9,593	$	145	$	9,738
Net income/(loss)	112		37		(6)		143		9		152
Distributions (Note 7)	(112)		(37)		(389)		(538)		(10)		(548)
Other comprehensive income	—		—		64		64		—		64
Repurchase of common units (Note 7)	—		—		(117)		(117)		—		(117)
Contributions from noncontrolling interests	—		—		—		—		1		1
Other	—		—		7		7		—		7
Balance at September 30, 2021	$	1,505	$	787	$	6,860	$	9,152	$	145	$	9,297

	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at June 30, 2021	$	1,505	$	787	$	7,203	$	9,495	$	145	$	9,640
Net income/(loss)	37		12		(108)		(59)		4		(55)
Distributions (Note 7)	(37)		(12)		(129)		(178)		(4)		(182)
Other comprehensive loss	—		—		(44)		(44)		—		(44)
Repurchase of common units (Note 7)	—		—		(64)		(64)		—		(64)

Other	—		—		2		2		—		2
Balance at September 30, 2021	$	1,505	$	787	$	6,860	$	9,152	$	145	$	9,297

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(continued)

(in millions)


	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at December 31, 2019	$	1,505	$	787	$	10,770	$	13,062	$	133	$	13,195
Net income/(loss)	112		37		(2,711)		(2,562)		7		(2,555)
Distributions	(112)		(37)		(524)		(673)		(6)		(679)
Other comprehensive loss	—		—		(129)		(129)		—		(129)
Contributions from noncontrolling interests	—		—		—		—		11		11
Other	—		—		8		8		—		8
Balance at September 30, 2020	$	1,505	$	787	$	7,414	$	9,706	$	145	$	9,851

	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at June 30, 2020	$	1,505	$	787	$	7,367	$	9,659	$	143	$	9,802
Net income	37		12		94		143		3		146
Distributions	(37)		(12)		(131)		(180)		(2)		(182)
Other comprehensive income	—		—		82		82		—		82
Contributions from noncontrolling interests	—		—		—		—		1		1
Other	—		—		2		2		—		2
Balance at September 30, 2020	$	1,505	$	787	$	7,414	$	9,706	$	145	$	9,851

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Organization and Basis of Consolidation and Presentation

Organization

Plains All American Pipeline, L.P. (“PAA”) is a Delaware limited partnership formed in 1998. Our operations are conducted directly and indirectly through our primary operating subsidiaries. As used in this Form 10-Q and unless the context indicates otherwise, the terms “Partnership,” “we,” “us,” “our,” “ours” and similar terms refer to PAA and its subsidiaries.

Our business model integrates large-scale supply aggregation capabilities with the ownership and operation of critical midstream infrastructure systems that connect major producing regions to key demand centers and export terminals. As one of the largest midstream service providers in North America, we own an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and natural gas liquids (“NGL”) producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada. Our assets and the services we provide are primarily focused on crude oil and NGL. Our business activities are conducted through three operating segments: Transportation, Facilities and Supply and Logistics. See Note 11 for further discussion of our operating segments.

Our non-economic general partner interest is held by PAA GP LLC (“PAA GP”), a Delaware limited liability company, whose sole member is Plains AAP, L.P. (“AAP”), a Delaware limited partnership. In addition to its ownership of PAA GP, as of September 30, 2021, AAP also owned a limited partner interest in us through its ownership of approximately 245.0 million of our common units (approximately 31% of our total outstanding common units and Series A preferred units combined). Plains All American GP LLC (“GP LLC”), a Delaware limited liability company, is AAP’s general partner. Plains GP Holdings, L.P. (“PAGP”) is the sole and managing member of GP LLC, and, at September 30, 2021, owned an approximate 79% limited partner interest in AAP. PAA GP Holdings LLC (“PAGP GP”) is the general partner of PAGP.

As the sole member of GP LLC, PAGP has responsibility for conducting our business and managing our operations; however, the board of directors of PAGP GP has ultimate responsibility for managing the business and affairs of PAGP, AAP and us. GP LLC employs our domestic officers and personnel; our Canadian officers and personnel are employed by our subsidiary, Plains Midstream Canada ULC.

References to our “general partner,” as the context requires, include any or all of PAGP GP, PAGP, GP LLC, AAP and PAA GP.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Definitions

Additional defined terms are used in this Form 10-Q and shall have the meanings indicated below:


AOCI	=	Accumulated other comprehensive income/(loss)
ASC	=	Accounting Standards Codification
ASU	=	Accounting Standards Update
Bcf	=	Billion cubic feet
Btu	=	British thermal unit
CAD	=	Canadian dollar
CODM	=	Chief Operating Decision Maker
EBITDA	=	Earnings before interest, taxes, depreciation and amortization
EPA	=	United States Environmental Protection Agency
FASB	=	Financial Accounting Standards Board
GAAP	=	Generally accepted accounting principles in the United States
ICE	=	Intercontinental Exchange
ISDA	=	International Swaps and Derivatives Association
LIBOR	=	London Interbank Offered Rate
LTIP	=	Long-term incentive plan
Mcf	=	Thousand cubic feet
MMbls	=	Million barrels
NGL	=	Natural gas liquids, including ethane, propane and butane
NYMEX	=	New York Mercantile Exchange
SEC	=	United States Securities and Exchange Commission
TWh	=	Terawatt hour
USD	=	United States dollar
WTI	=	West Texas Intermediate

Basis of Consolidation and Presentation

The accompanying unaudited condensed consolidated interim financial statements and related notes thereto should be read in conjunction with our 2020 Annual Report on Form 10-K. The accompanying condensed consolidated financial statements include the accounts of PAA and all of its wholly owned subsidiaries and those entities that it controls. Investments in entities over which we have significant influence but not control are accounted for by the equity method. We apply proportionate consolidation for pipelines and other assets in which we own undivided joint interests. The financial statements have been prepared in accordance with the instructions for interim reporting as set forth by the SEC. All adjustments (consisting only of normal recurring adjustments) that in the opinion of management were necessary for a fair statement of the results for the interim periods have been reflected. All significant intercompany transactions have been eliminated in consolidation, and certain reclassifications have been made to information from previous years to conform to the current presentation.

The condensed consolidated balance sheet data as of December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three and nine months ended September 30, 2021 should not be taken as indicative of results to be expected for the entire year.

Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2—Summary of Significant Accounting Policies

Restricted Cash

Restricted cash includes cash held by us that is unavailable for general use and is comprised of amounts advanced to us by certain equity method investees related to the construction of fixed assets where we serve as construction manager. The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on our Condensed Consolidated Balance Sheets that sum to the total of the amounts shown on our Condensed Consolidated Statements of Cash Flows (in millions):


	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	191	$	22
Restricted cash	3		38
Total cash and cash equivalents and restricted cash	$	194	$	60

Property and Equipment

During the first quarter of 2021, we modified the useful lives of certain of our Pipelines and related facilities and Storage, terminal and rail facilities to useful lives of 10 to 50 years from useful lives of 10 to 70 years to reflect current expectations given our future operating and commercial outlook. These depreciable life adjustments will prospectively increase depreciation expense. For the three and nine months ended September 30, 2021, these reductions in useful lives increased depreciation expense by approximately $18 million and $54 million, respectively, which resulted in a decrease to both basic and diluted net income per common unit of approximately $0.02 for the three months ended September 30, 2021 and approximately $0.07 for the nine months ended September 30, 2021 from what these amounts would have been absent the change in useful lives.

Recent Accounting Pronouncements

Except as discussed below and in our 2020 Annual Report on Form 10-K, there have been no new accounting pronouncements that have become effective or have been issued during the nine months ended September 30, 2021 that are of significance or potential significance to us.

Accounting Standards Updates Adopted During the Period

We adopted the following ASUs during the period:

•ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. See Note 2 to our Consolidated Financial Statements included in Part IV of our 2020 Annual Report on Form 10-K for additional information regarding this ASU. We adopted this ASU effective January 1, 2021 and our adoption did not have a material impact on our financial position, results of operations or cash flows.

•ASU 2021-05, Leases (Topic 842): Lessors - Certain Leases with Variable Lease Payments. Issued by the FASB in July 2021, ASU 2021-05 modifies the lease classification requirements for lessors in Topic 842, which we adopted on the effective date of January 1, 2019. The amendments require lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease at lease commencement if another classification (i.e., sales-type or direct financing) would result in the recognition of a day-one loss. For entities that have adopted Topic 842, the guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. We have elected to early adopt the guidance on a prospective basis as of July 1, 2021. Our adoption did not have a material impact on our financial position, results of operations or cash flows.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3—Revenues and Accounts Receivable

Revenue Recognition

We disaggregate our revenues by segment and type of activity. These categories depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. See Note 3 to our Consolidated Financial Statements included in Part IV of our 2020 Annual Report on Form 10-K for additional information regarding our types of revenues and policies for revenue recognition.

The following tables present our Supply and Logistics, Transportation and Facilities segment revenues from contracts with customers disaggregated by type of activity (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Supply and Logistics segment revenues from contracts with customers
Crude oil transactions	$	10,417	$	5,394	$	27,747	$	15,644
NGL and other transactions	310		180		1,279		736
Total Supply and Logistics segment revenues from contracts with customers	$	10,727	$	5,574	$	29,026	$	16,380


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Transportation segment revenues from contracts with customers
Tariff activities:
Crude oil pipelines	$	479	$	442	$	1,338	$	1,360
NGL pipelines	26		26		79		77
Total tariff activities	505		468		1,417		1,437
Trucking	18		20		60