Net Income/(Loss) Per Class A Share

9 Months Ended

Sep. 30, 2020

Basic net income/(loss) per Class A share is determined by dividing net income/(loss) attributable to PAGP by the weighted average number of Class A shares outstanding during the period. Our Class B and Class C shares do not share in the earnings of the Partnership; accordingly, basic and diluted net income per Class B and Class C share has not been presented.

Diluted net income/(loss) per Class A share is determined by dividing net income/(loss) attributable to PAGP by the diluted weighted average number of Class A shares outstanding during the period. For purposes of calculating diluted net income per Class A share, both the net income/(loss) attributable to PAGP and the diluted weighted average number of Class A shares outstanding consider the impact of possible future exchanges of (i) AAP units and the associated Class B shares into our Class A shares and (ii) certain Class B units of AAP (referred to herein as “AAP Management Units”) into our Class A shares. In addition, the calculation of the diluted weighted average number of Class A shares outstanding considers the effect of potentially dilutive awards under the Plains GP Holdings, L.P. Long-Term Incentive Plan (the “PAGP LTIP”).

All AAP Management Units that have satisfied the applicable performance conditions are considered potentially dilutive. Exchanges of potentially dilutive AAP units and AAP Management Units are assumed to have occurred at the beginning of the period and the incremental income attributable to PAGP resulting from the assumed exchanges is representative of the incremental income that would have been attributable to PAGP if the assumed exchanges occurred on that date. See Note 12 to our Consolidated Financial Statements included in Part IV of our 2019 Annual Report on Form 10-K for information regarding exchanges of AAP units and AAP Management Units. PAGP LTIP awards that are deemed to be dilutive are reduced by a hypothetical share repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB. See Note 18 to our Consolidated Financial Statements included in Part IV of our 2019 Annual Report on Form 10-K for information regarding PAGP LTIP awards.

On a weighted-average basis, for the three months ended September 30, 2020 and 2019, the possible exchange of 60 million and 96 million AAP units, respectively, and for the nine months ended September 30, 2020 and 2019, the possible exchange of 63 million and 109 million AAP units, respectively, would not have had a dilutive effect on basic net income/(loss) per Class A share. For the three months ended September 30, 2020 and 2019, the possible exchange of 1 million and 2 million AAP Management Units, respectively, and for the nine months ended September 30, 2020, the possible exchange of 1 million AAP Management Units would not have had a dilutive effect on basic net income/(loss) per Class A share on a weighted-average basis. For the three and nine months ended September 30, 2020, our PAGP LTIP awards were antidilutive. For the three and nine months ended September 30, 2019, our PAGP LTIP awards were dilutive; however, there were less than 0.1 million dilutive LTIP awards for each period, which did not change the presentation of diluted weighted average Class A shares outstanding or diluted net income/(loss) per Class A share.

The following table sets forth the computation of basic and diluted net income/(loss) per Class A share (in millions, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic Net Income/(Loss) per Class A Share
Net income/(loss) attributable to PAGP	$	17	$	70	$	(548)	$	283
Basic weighted average Class A shares outstanding	186		168		184		163

Basic net income/(loss) per Class A share	$	0.09	$	0.41	$	(2.97)	$	1.73

Diluted Net Income/(Loss) per Class A Share
Net income/(loss) attributable to PAGP	$	17	$	70	$	(548)	$	283
Incremental net income attributable to PAGP resulting from assumed exchange of AAP Management Units	—		—		—		1
Net income/(loss) attributable to PAGP including incremental net income from assumed exchange of AAP Management Units	$	17	$	70	$	(548)	$	284

Basic weighted average Class A shares outstanding	186		168		184		163
Dilutive shares resulting from assumed exchange of AAP Management Units	—		—		—		2
Diluted weighted average Class A shares outstanding	186		168		184		165

Diluted net income/(loss) per Class A share	$	0.09	$	0.41	$	(2.97)	$	1.72