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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:
"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."
Plains GP Holdings LP's Owner Earnings per Share (TTM) ended in Jun. 2024 was $1.36. It's Price-to-Owner-Earnings ratio for today is 13.82.
The historical rank and industry rank for Plains GP Holdings LP's Owner Earnings per Share (TTM) or its related term are showing as below:
During the past 13 years, the highest Price-to-Owner-Earnings ratio of Plains GP Holdings LP was 333.60. The lowest was 3.41. And the median was 8.97.
Plains GP Holdings LP's Earnings per Share (Diluted) for the three months ended in Jun. 2024 was $0.20. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jun. 2024 was $0.82. It's PE Ratio (TTM) ratio for today is 22.93.
Plains GP Holdings LP's EPS without NRI for the three months ended in Jun. 2024 was $0.19. Its EPS without NRI for the trailing twelve months (TTM) ended in Jun. 2024 was $0.98. It's PE Ratio without NRI ratio for today is 19.20.
The historical data trend for Plains GP Holdings LP's Owner Earnings per Share (TTM) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Plains GP Holdings LP Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Owner Earnings per Share (TTM) | Get a 7-Day Free Trial | -1.68 | -7.00 | -1.18 | 1.64 | 4.36 |
Plains GP Holdings LP Quarterly Data | ||||||||||||||||||||
Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | |
Owner Earnings per Share (TTM) | Get a 7-Day Free Trial | 4.25 | 1.04 | 4.36 | 2.06 | 1.36 |
For the Oil & Gas Midstream subindustry, Plains GP Holdings LP's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Oil & Gas industry and Energy sector, Plains GP Holdings LP's Price-to-Owner-Earnings distribution charts can be found below:
* The bar in red indicates where Plains GP Holdings LP's Price-to-Owner-Earnings falls into.
In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:
"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."
To make it simple, then you will have:
Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)
Plains GP Holdings LP's Owner Earnings per Share (TTM) Calculation:
TTM / Last Quarter | Average of Last 20 Quarters | |
Net Income | 162 | |
Depreciation, Depletion and Amortization | 1,045 | |
Change In Deferred Tax | -35 | |
5Y Average of Maintenance Capital Expenditure | 568 | |
Change In Working Capital | -336 | |
Shares Outstanding (Diluted Average) | 197 |
1. Start with "Net Income" from income statement. Plains GP Holdings LP's Net Income for the trailing twelve months (TTM) ended in Jun. 2024 was $162 Mil.
2. "Depreciation, Depletion and Amortization" is from cashflow statement. Plains GP Holdings LP's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jun. 2024 was $1,045 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.
3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income.
Plains GP Holdings LP's Change In Deferred Tax for the trailing twelve months (TTM) ended in Jun. 2024 was $-35 Mil.
4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $568 Mil
It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.
The following shows how to get maintenance capital expenditure.
First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.
Plains GP Holdings LP's 5-Year Average Maintenance Capital Expenditure = $568 Mil
5. "Change In Working Capital" is from cashflow statement. Plains GP Holdings LP's Change In Working Capital for the trailing twelve months (TTM) ended in Jun. 2024 was $-336 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.
6. Plains GP Holdings LP's Shares Outstanding (Diluted Average) for the months ended in Jun. 2024 was 197.000 Mil.
Plains GP Holdings LP's Onwer Earnings Per Share for Jun. 2024 is calculated as:
Owner Earnings per Share (TTM) | |||||
= | ( Net Income | + | Depreciation, Depletion and Amortization | + | Change In Deferred Tax |
= | ( 162 | + | 1045 | + | -35 |
- | 5Y Avg of Maintenance CAPEX | + | Change In Working Capital ) | / | Shares Outstanding (Diluted Average) |
- | 567.8568484328 | + | -336) | / | 197.000 |
= | 1.36 |
Price-to-Owner-Earnings | = | Current Price | / | Owner Earnings per Share (TTM) |
= | 18.80 | / | 1.36 | |
= | 13.82 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.
Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.
Thank you for viewing the detailed overview of Plains GP Holdings LP's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.
Willie Cw Chiang | director, officer: Chairman & CEO | 370 17TH STREET, SUITE 2775, DENVER CO 80202 |
Jeremy L. Goebel | officer: EVP & CCO | 333 CLAY STREET, SUITE 1600, HOUSTON TX 77002 |
Ellen Desanctis | director | 12326 OLD OAKS, HOUSTON TX 77024 |
Kevin S Mccarthy | director | C/O KAYNE ANDERSON CAPITAL ADVISORS, LP, 1800 AVENUE OF THE STARS, SECOND FLOOR, LOS ANGELES CA 90067 |
Gary R Petersen | director | 210 HEDWIG, HOUSTON TX 77019 |
Victor Burk | director | C/O ENERVEST MANAGEMENT PARTNERS LTD, 1001 FANNIN STREET, SUITE 800, HOUSTON TX 77002 |
Lawrence Michael Ziemba | director | 600 NORTH DAIRY ASHFORD, HOUSTON TX 77079 |
John T Raymond | director | THE ENERGY & MINERALS GROUP, 811 MAIN STREET, SUITE 4200, HOUSTON TX 77002 |
Alexandra Pruner | director | 1201 LAKE ROBBINS DRIVE, THE WOODLANDS TX 77380 |
Bobby S Shackouls | director | 5051 WESTHEIMER, STE 1400, HOUSTON TX 77056-5604 |
Chris Temple | director | 3953 MAPLE AVENUE, SUITE 180, DALLAS TX 75219 |
Emg Investment, Llc | director, See Remarks | 1401 MCKINNEY STREET, SUITE 1025, HOUSTON TX 77010 |
Robert V Sinnott | director | 1800 AVENUE OF THE STARS, 3RD FLOOR, LOS ANGELES CA 90067 |
Greg L Armstrong | director, 10 percent owner, officer: Chairman & CEO | |
Harry N Pefanis | officer: President & COO | 333 CLAY STREET, STE 1600, HOUSTON TX 77002 |
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