Document


Introduction			F-2
Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2021			F-3
Unaudited Pro Forma Condensed Statement of Combined Operations for the Six Months Ended June 30, 2021			F-4
Unaudited Pro Forma Condensed Statement of Combined Operations for the Year Ended December 31, 2020			F-5
Notes to the Unaudited Pro Forma Condensed Combined Financial Statements			F-6

On October 5, 2021, pursuant to the terms of an Agreement and Plan of Merger dated as of July 12, 2021 (the “Merger Agreement”) between subsidiaries of Plains All American Pipeline, L.P. (“PAA” or the “Registrant”), a wholly-owned subsidiary of Plains GP Holdings, L.P. (“PAGP”), and Oryx Midstream Holdings LLC (together with certain affiliates, “Oryx”), a portfolio company of Stonepeak Infrastructure Partners (“Stonepeak”), PAA and Oryx completed the merger (the "transaction"), in a cashless transaction, of their respective Permian Basin assets, operations and commercial activities into a newly formed strategic joint venture, Plains Oryx Permian Basin LLC (the “Joint Venture”). The Joint Venture, which will be consolidated within PAA's financial statements, is owned 65% by PAA and 35% by Oryx; PAA will serve as operator of the Joint Venture.

The following unaudited pro forma condensed statements of combined operations for the six months ended June 30, 2021 and for the year ended December 31, 2020 have been prepared as if the transaction described above had taken place on January 1, 2020. The unaudited pro forma condensed combined balance sheet as of June 30, 2021 assumes the transaction was consummated on June 30, 2021.

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of SEC Regulation S-X and includes pro forma adjustments that are directly attributable to the transaction and factually supportable. Certain reclassifications have been made to the historical presentation of Oryx's financial statements to conform to our presentation and to the presentation of the pro forma financial statements contained herein. See Note 5 for additional information.

The formation of the Joint Venture is accounted for as a business combination and thus the Transaction Accounting Adjustments presented in the unaudited pro forma condensed combined financial statements have been prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations ("ASC 805"). The unaudited pro forma condensed combined financial statements are based on assumptions that we believe are reasonable under the circumstances and are intended for informational purposes only. They reflect management’s preliminary estimates of the values of the assets acquired and liabilities assumed, pending the completion of valuation procedures. A change in the unaudited pro forma adjustments of the purchase price for the transaction would primarily result in an adjustment to the determined fair values assigned to tangible and intangible assets. The income statement effect of these changes will depend on the nature and amount of the adjustments.

The unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of the actual or future operations or financial condition that would have been achieved had the transaction occurred at the dates assumed (as noted above). The actual results in the periods following the transaction may differ significantly from those reflected in the unaudited pro forma condensed combined financial statements for a number of reasons including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma condensed combined financial data and the actual amounts and the completion of a final valuation of the transaction.

June 30, 2021
(in millions)


	PAA Historical		Oryx Historical As Adjusted (Note 5)		Pro Forma Adjustments			PAA Pro Forma Combined
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	24	$	18	$	(18)	(b)	$	24
Restricted cash	7		—		—			7
Trade accounts receivable and other receivables, net	3,897		52		—			3,949
Inventory	675		—		—			675
Other current assets	1,073		5		1		(h)	1,079
Total current assets	5,676		75		(17)			5,734

PROPERTY AND EQUIPMENT, NET	13,451		1,448		439		(a)	15,338

OTHER ASSETS
Investments in unconsolidated entities	3,745		129		(30)		(a)	3,844

Linefill and base gas	909		3		2		(a)	914
Long-term operating lease right-of-use assets, net	344		—		—			344
Long-term inventory	210		—		—			210
Other long-term assets, net	1,056		1,975		(722)		(a)	2,309
Total assets	$	25,391	$	3,630	$	(328)		$	28,693

LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Trade accounts payable	$	4,112	$	53	$	15	(g)	$	4,180

Short-term debt	1,456		15		(15)		(j)	1,456
Other current liabilities	595		18		(18)		(j)	596
					1		(h)
Total current liabilities	6,163		86		(17)			6,232

LONG-TERM LIABILITIES
Senior notes, net of unamortized discount	8,326		1,412		(1,412)		(j)	8,326
Other long-term debt, net	63		—		—			63
Long-term operating lease liabilities	289		—		—			289
Other long-term liabilities and deferred credits	910		25		(23)		(j)	912
Total long-term liabilities	9,588		1,437		(1,435)			9,590

COMMITMENTS AND CONTINGENCIES

PARTNERS' CAPITAL
Preferred unitholders	2,292		—		—			2,292
Common unitholders	7,203		2,107		(2,107)		(a)	7,787
					599		(a)
					(15)		(g)
Total partners' capital excluding noncontrolling interests	9,495		2,107		(1,523)			10,079
Noncontrolling interests	145		—		2,647		(a)	2,792
Total partners' capital	9,640		2,107		1,124			12,871
Total liabilities and partners' capital	$	25,391	$	3,630	$	(328)		$	28,693


	PAA Historical		Oryx Historical As Adjusted (Note 5)		Pro Forma Adjustments			PAA Pro Forma Combined
REVENUES	$	18,313	$	183	$	(8)	(e)	$	18,488

COSTS AND EXPENSES
Purchases and related costs	16,669		40		(8)		(e)	16,701
Field operating costs	471		17		—			488
General and administrative expenses	139		17		—			156
Depreciation and amortization	374		79		(79)		(c)	478
					104		(d)
(Gains)/losses on asset sales and asset impairments, net	370		—		—			370
Total costs and expenses	18,023		153		17			18,193

OPERATING INCOME	290		30		(25)			295

OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities	121		4		—			125
Interest expense	(213)		(28)		28		(j)	(213)
Other income/(expense), net	23		—		—			23

INCOME BEFORE TAX	221		6		3			230
Current income tax (expense)/benefit	(3)		2		—		(i)	(1)
Deferred income tax expense	(11)		—		—		(i)	(11)

NET INCOME	207		8		3			218
Net income attributable to noncontrolling interests	(5)		—		(64)		(f)	(69)
NET INCOME ATTRIBUTABLE TO PAA	$	202	$	8	$	(61)		$	149

NET INCOME PER COMMON UNIT:
Net income allocated to common unitholders - Basic and diluted	$	103						$	50
Basic and diluted weighted average common units outstanding	721							721
Basic and diluted net income per common unit	$	0.14						$	0.07


	PAA Historical		Oryx Historical As Adjusted (Note 5)		Pro Forma Adjustments			PAA Pro Forma Combined
REVENUES	$	23,290	$	259	$	(13)	(e)	$	23,536

COSTS AND EXPENSES
Purchases and related costs	20,431		(26)		(13)		(e)	20,392
Field operating costs	1,076		44		—			1,120
General and administrative expenses	271		41		15		(g)	327
Depreciation and amortization	653		156		(156)		(c)	866
					213		(d)
(Gains)/losses on asset sales and asset impairments, net	719		—		—			719
Goodwill impairment losses	2,515		451		—			2,966
Total costs and expenses	25,665		666		59			26,390

OPERATING INCOME/(LOSS)	(2,375)		(407)		(72)			(2,854)

OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities	355		(6)		—			349
Gain on/(impairment of) investments in unconsolidated entities, net	(182)		—		—			(182)
Gain on bargain purchase	—		57		—			57
Interest expense	(436)		(141)		141		(j)	(436)
Other income/(expense), net	39		—		—			39

INCOME/(LOSS) BEFORE TAX	(2,599)		(497)		69			(3,027)
Current income tax expense	(51)		(1)		—		(i)	(52)
Deferred income tax benefit	70		—		—		(i)	70

NET INCOME/(LOSS)	(2,580)		(498)		69			(3,009)
Net (income)/loss attributable to noncontrolling interests	(10)		—		121		(f)	111
NET INCOME/(LOSS) ATTRIBUTABLE TO PAA	$	(2,590)	$	(498)	$	190		$	(2,898)

NET LOSS PER COMMON UNIT:
Net loss allocated to common unitholders - Basic and diluted	$	(2,790)						$	(3,098)
Basic and diluted weighted average common units outstanding	728							728
Basic and diluted net loss per common unit	$	(3.83)						$	(4.26)

The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X. The pro forma financial information includes adjustments that depict the accounting for the transaction using Transaction Accounting Adjustments (as defined in Article 11). Adjustments depicting synergies and dis-synergies of the transaction (“Management Adjustments”) are not presented herein.

These unaudited pro forma condensed combined financial statements and underlying pro forma adjustments are based upon currently available information and certain estimates and assumptions that management believes are factually supportable; therefore, actual results could differ materially from the pro forma information. However, we believe the assumptions provide a reasonable basis for presenting the significant effects of the transaction noted herein. We believe the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the pro forma information.

The formation of the Joint Venture is accounted for as a business combination in accordance with ASC 805. As the majority owner and the controlling entity, PAA is considered the acquirer and as such the PAA predecessor business is accounted for at historical cost, while the Oryx predecessor business is accounted for at fair value. In accordance with ASC 805, the fair value of Oryx’s ownership interest in the Joint Venture following the formation is utilized as the consideration transferred for the purchase price allocation. The following table presents the fair value of the consideration transferred in the transaction (in millions):

The transaction has been accounted for using the acquisition method of accounting and the determination of the fair value of the assets acquired and liabilities assumed has been estimated in accordance with ASC 805. The following table shows our preliminary determination of the fair value of those assets and liabilities as of June 30, 2021 (in millions):

This preliminary purchase price allocation has been used to prepare the Transaction Accounting Adjustments in the pro forma condensed combined balance sheet and statement of operations. The analysis was performed based on estimates that are reflective of market participant assumptions. The determination of the fair value of the assets acquired and liabilities assumed is preliminary pending the completion of valuation procedures and other potential adjustments. The final allocation is expected to be completed as soon as practicable and could differ materially from the preliminary allocation used in the Transaction Accounting Adjustments.

Intangible Assets are comprised of customer relationships with a 20 year life. Amortization of these customer relationships under the declining balance method of amortization is estimated to be approximately $72 million for the remaining six months of 2021 and approximately $131 million, $119 million, $107 million, $93 million and $82 million, respectively, for each of the five years thereafter.

(a)Reflects adjustments to fair value of the assets acquired and liabilities assumed in the transaction based on the acquisition method of accounting. Reflects the elimination of Oryx's historical Partners' capital balance and the recognition of Oryx's 35% Noncontrolling interest in the Joint Venture. The difference between the Noncontrolling interest recognized and the fair value of Oryx's assets acquired and liabilities assumed is recognized by PAA as a gain within Partners' capital.

(d)Reflects the depreciation on the acquired property and equipment under the straight-line method of depreciation over remaining average useful lives ranging from 3 to 30 years. Also reflects the amortization of the intangible assets under the declining balance method resulting in amortization expense of $72 million and $149 million for the six months ended June 30, 2021, and the year ended December 31, 2020, respectively.

(e)Reflects the elimination of transactions between PAA and Oryx as follows: $8 million from Revenues and Purchases and related costs for the six months ended June 30, 2021, and $13 million from Revenues and Purchases and related costs for the year ended December 31, 2020. There were no material balances between PAA and Oryx for Trade accounts receivable and other receivables, net and Trade accounts payable.

(g)Reflects transaction and other costs that are directly attributable to the transaction. Costs of $15 million that are expected to be incurred subsequent to completion of the transaction are reflected as an adjustment to Trade accounts payable on the pro forma condensed combined balance sheet, with the offset to Partners’ capital. This amount has been recorded as an adjustment to General and administrative expense in the pro forma statement of operations for the year ended December 31, 2020.

(h)Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842 with respect to the accounting for leases, allows different adoption dates for certain companies. As a result, PAA adopted ASC 842 on January 1, 2019, whereas Oryx had not yet adopted ASC 842 as of June 30, 2021. The unaudited pro forma condensed combined financial statements are adjusted for the estimated impact of ASC 842, assuming Oryx had adopted this standard as of June 30, 2021, for the unaudited pro forma condensed combined balance sheet, and as of January 1, 2020 for the unaudited pro forma condensed combined statements of operations. The adjustments are not material to either the unaudited pro forma condensed combined balance sheet or statements of operations.

(j)Oryx refinanced its debt prior to the completion of the transaction. As a result, the pro forma adjustments reflect the elimination of Oryx's outstanding Short-term debt of $15 million, long-term debt of $1,412 million included within Senior notes, net, and accrued interest rate swaps of $41 million of which $18 million is included within Other current liabilities and $23 million is included within Other long-term liabilities and deferred credits as of June 30, 2021. The offset to this adjustment is within Partners' capital. Also reflects the elimination of Oryx's historical Interest expense of $28 million and $141 million for the six months ended June 30, 2021 and the year ended December 31, 2020, respectively.

Pro forma basic and diluted net income/(loss) per common unit is determined by dividing the pro forma net income/(loss) attributable to PAA (after deducting amounts allocated to preferred unitholders and participating securities) by the basic and diluted weighted average number of common units outstanding during the applicable periods. The transaction did not involve the issuance or redemption of securities. For purposes of this calculation, we assumed that distributions were equal to historical PAA distributions for the respective periods; all remaining excess earnings were assumed to be allocated to our common unitholders and participating securities in accordance with the contractual terms of our partnership agreement. Because our partnership agreement requires us to distribute available cash rather than earnings reflected in our statement of operations and the pro forma net income per unit calculation has been prepared on an annual basis in lieu of a quarterly basis, actual cash distributions declared and paid by us may vary significantly from reported pro forma net income per common unit.

Reclassification adjustments were made to Oryx's historical balance sheet as of June 30, 2021, and the statements of operations for the six months ended June 30, 2021 and the twelve months ended December 31, 2020. Certain balance sheet and income statement line items presented by Oryx under GAAP have been reclassified to align with the presentation used by PAA under GAAP. These reclassification adjustments are shown in the tables below and are as follows:

Balance Sheet/Income Statement

Historical

Reclassification

Balance Sheet

Accounts receivable - related party

Trade accounts receivable and other receivables, net

Balance Sheet

Other property and equipment, net

Property and equipment, net

Balance Sheet

Property and equipment, net

Linefill and base gas

Balance Sheet

Intangibles, net

Other long-term assets, net

Balance Sheet

Accounts payable

Trade accounts payable

Balance Sheet

Accrued expenses

Trade accounts payable

Balance Sheet

Accounts payable - related party

Trade accounts payable

Balance Sheet

Interest rate swap

Other long-term liabilities and deferred credits

Income Statement

Trucking and lease capacity fees

Purchases and related costs

Income Statement

Costs of Goods Sold

Purchases and related costs

Income Statement

Compensation expense

General and administrative expenses/Field operating costs

Income Statement

Stock compensation expense allocated from parent

General and administrative expenses/Field operating costs

Income Statement

Revenue

Purchases and related costs


	Oryx		Reclassification		Oryx Historical
	Historical		Adjustments		As Adjusted
CURRENT ASSETS
Cash and cash equivalents	$	18	$	—	$	18

Trade accounts receivable and other receivables, net	51		1		52
Accounts receivable - related party	1		(1)		—

Other current assets	5		—		5
	75		—		75

Property and equipment, net	1,449		(1)		1,448
Other property and equipment, net	2		(2)		—
Linefill and base gas	—		3		3
Investments in unconsolidated entities	129		—		129
Other long-term assets, net	3		1,972		1,975
Intangibles, net	1,972		(1,972)		—

TOTAL ASSETS	$	3,630	$	—	$	3,630


CURRENT LIABILITIES
Accounts payable	12		(12)		—
Trade accounts payable	—		53		53
Accrued expenses	39		(39)		—
Accounts payable - related party	2		(2)		—
Short-term debt	15		—		15
Other current liabilities	18		—		18
	86		—		86

LONG-TERM LIABILITIES
Senior notes, net of unamortized discount	1,412		—		1,412
Interest rate swap	23		(23)		—
Other long-term liabilities and deferred credits	2		23		25
TOTAL LIABILITIES	1,523		—		1,523

MEMBER'S EQUITY	2,107		—		2,107

TOTAL LIABILITIES AND MEMBER'S EQUITY	$	3,630	$	—	$	3,630


	Oryx		Reclassification		Oryx Historical
	Historical		Adjustments		As Adjusted








REVENUE	$	245	$	(62)	$	183

COSTS OF GOODS SOLD	93		(93)		—

EXPENSES
Trucking and lease capacity fees	9		(9)		—
Depreciation and amortization	79		—		79
Compensation expense	10		(10)		—
Field operating costs	12		5		17
General and administrative expenses	7		10		17
Stock compensation expense allocated from parent	5		(5)		—
Purchases and related costs	—		40		40
	215		(62)		153

INCOME FROM EQUITY METHOD INVESTMENT	4		—		4

INCOME FROM OPERATIONS	34		—		34

OTHER INCOME (EXPENSE)

Interest expense	(28)		—		(28)


NET INCOME BEFORE STATE INCOME TAX EXPENSE	6		—		6

STATE INCOME TAX BENEFIT	2		—		2

NET INCOME	$	8	$	—	$	8


	Oryx		Reclassification		Oryx Historical
	Historical		Adjustments		As Adjusted






REVENUE	$	369	$	(110)	$	259

COST OF GOODS SOLD	68		(68)		—

EXPENSES
Trucking and lease capacity fees	16		(16)		—
Depreciation and amortization	156		—		156
Compensation expense	19		(19)		—
Field operating costs	34		10		44
General and administrative expenses	16		25		41
Stock compensation expense allocated from parent	16		(16)		—
Purchases and related costs	—		(26)		(26)
Impairment of goodwill	451		—		451
	776		(110)		666

INCOME (LOSS) FROM EQUITY METHOD INVESTMENT	(6)		—		(6)

INCOME (LOSS) FROM OPERATIONS	(413)		—		(413)

OTHER INCOME (EXPENSE)

Interest expense	(141)		—		(141)

Gain on bargain purchase	57		—		57


NET INCOME (LOSS) BEFORE STATE INCOME TAX EXPENSE	(497)		—		(497)

STATE INCOME TAX EXPENSE	(1)		—		(1)

NET INCOME (LOSS)	$	(498)	$	—	$	(498)


Consideration:
Ownership Interest	$	3,246
Total consideration transferred	$	3,246


			Average Depreciable
Description	Amount		Life (in years)
Working capital and other assets, net	$	5	n/a
Linefill and base gas	5		n/a
Property and Equipment, net	1,887		3 - 30
Intangible Assets (included within Other long-term assets, net)	1,250		20
Investments in unconsolidated entities	99		n/a


Total	$	3,246