SEC Comment Letter 0000000000-23-005089 to PLAINS GP HOLDINGS LP (PAGP)
PLAINS GP HOLDINGS LP
Date: May 12, 2023 · CIK: 0001581990 · Accession: 0000000000-23-005089
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-36132
Letter
United States securities and exchange commission logo May 12, 2023 Al Swanson Chief Financial Officer Plains GP Holdings LP 333 Clay Street, Suite 1600 Houston , Texas 77002 Re:Plains GP Holdings LP Form 10-K for the Fiscal Year ended December 31, 2022 Filed March 1, 2023 File No. 001-36132 Dear Al Swanson: We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10-K for the Fiscal Year ended December 31, 2022 Financial Statements Note 19 - Commitments and Contingencies, page F-54 1.We note your disclosure concerning the crude oil release from the Las Flores to Gaviota Pipeline (Line 901), indicating that as of December 31, 2022 you recognized a long-term receivable of $225 million for costs that you believe are probable of recovery from insurance, net of deductibles and amounts already collected.
However, you also have disclosure on page 91, explaining that in the fourth quarter of 2022, insurers responsible for the majority of your remaining insurance coverage of the Line 901 incident, formally communicated a denial of coverage.
We generally believe that an asset should not be recognized for a claim for recovery from a party that is asserting that it is not liable for indemnification, absent a clear basis for concluding that the amounts are probable of recovery. If a clear basis has been
FirstName LastName Al Swanson Comapany NamePlains GP Holdings LP May 12, 2023 Page 2 FirstName LastName Al Swanson Plains GP Holdings LP May 12, 2023 Page 2 established, the rationale should be apparent from the accompanying disclosure, consistent with the guidance in footnote 49 to the Answer to Question 2 of SAB Topic 5Y.
Tell us how you are able to support your view that the long-term receivable amounts are probable of recovery, considering the insurers' denial of coverage and the various uncertainties expressed in your disclosure on page 91, including factors that could impact the timing and amount of recovery, or adversely impact your assessment, the possibility the insurers could become insolvent, and your inability to provide any assurance that actual recoveries will not vary significantly from the long-term receivable amount.
If you believe that you are able to provide persuasive rationale also submit the disclosure revisions that you propose to address the disclosure concerns for both Plains GP Holdings LP, and your public subsidiary Plains All American Pipeline LP.
Alternatively, if you are unable to provide adequate support for your view that the long- term receivable amounts are probable of recovery, you will need to revise the financial statements of both entities to eliminate the receivable and recognize the loss. In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact John Cannarella, Staff Accountant, at (202) 551-3337 or Karl Hiller, Branch Chief, at (202) 551-3686 with any questions. Sincerely, Division of Corporation Finance Office of Energy & Transportation
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United States securities and exchange commission logo
May 12, 2023
Al Swanson
Chief Financial Officer
Plains GP Holdings LP
333 Clay Street, Suite 1600
Houston , Texas 77002
Re:Plains GP Holdings LP
Form 10-K for the Fiscal Year ended December 31, 2022
Filed March 1, 2023
File No. 001-36132
Dear Al Swanson:
We have limited our review of your filing to the financial statements and related
disclosures and have the following comments. In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2022
Financial Statements
Note 19 - Commitments and Contingencies, page F-54
1.We note your disclosure concerning the crude oil release from the Las Flores to Gaviota
Pipeline (Line 901), indicating that as of December 31, 2022 you recognized a long-term
receivable of $225 million for costs that you believe are probable of recovery from
insurance, net of deductibles and amounts already collected.
However, you also have disclosure on page 91, explaining that in the fourth quarter of
2022, insurers responsible for the majority of your remaining insurance coverage of the
Line 901 incident, formally communicated a denial of coverage.
We generally believe that an asset should not be recognized for a claim for recovery from
a party that is asserting that it is not liable for indemnification, absent a clear basis for
concluding that the amounts are probable of recovery. If a clear basis has been
FirstName LastName Al Swanson
Comapany NamePlains GP Holdings LP
May 12, 2023 Page 2
FirstName LastName
Al Swanson
Plains GP Holdings LP
May 12, 2023
Page 2
established, the rationale should be apparent from the accompanying disclosure, consistent
with the guidance in footnote 49 to the Answer to Question 2 of SAB Topic 5Y.
Tell us how you are able to support your view that the long-term receivable amounts
are probable of recovery, considering the insurers' denial of coverage and the various
uncertainties expressed in your disclosure on page 91, including factors that could impact
the timing and amount of recovery, or adversely impact your assessment, the possibility
the insurers could become insolvent, and your inability to provide any assurance that
actual recoveries will not vary significantly from the long-term receivable amount.
If you believe that you are able to provide persuasive rationale also submit the disclosure
revisions that you propose to address the disclosure concerns for both Plains GP Holdings
LP, and your public subsidiary Plains All American Pipeline LP.
Alternatively, if you are unable to provide adequate support for your view that the long-
term receivable amounts are probable of recovery, you will need to revise the financial
statements of both entities to eliminate the receivable and recognize the loss.
In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.
You may contact John Cannarella, Staff Accountant, at (202) 551-3337 or Karl Hiller,
Branch Chief, at (202) 551-3686 with any questions.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation