Provides Update on Permian Long-Haul Contracting & Announces Bolt-on Acquisitions HOUSTON, May 03, 2024 (GLOBE NEWSWIRE) -- Plains All American Pipeline, L.P. (NASDAQ:PAA) and Plains GP Holdings (NASDAQ:PAGP) today reported first-quarter 2024 results and reaffirmed full-year 2024 Adjusted EBITDA guidance. Plains also provided updates on Permian long-haul contracting and announced two bolt-on acquisitions. First-Quarter Results Reported Net income attributable to PAA of $266 million and Net cash provided by operating activities of $419 million Delivered Adjusted EBITDA attributable to PAA of $718 million; on-track to meet full-year guidance of $2.625 - $2.725 billion Generated Adjusted Free Cash Flow of $262 million (excluding changes in Assets & Liabilities; including bolt-on acquisition capital) Increased annualized common distribution by $0.20 to $1.27 per unit (~19% increase, paid in February) Permian Long-Haul Contracting Update Increased contracted volumes and extended the term of certain contracts such that the weighted average contract duration of our Permian long-haul portfolio is approximately 5-years, through 2028, including new contracts or extensions on Cactus I, Cactus II and Basin/Sunrise Expect underlying growth in the business and contributions from efficient growth investments to offset lower contracted rates resulting in broadly flat Adj. EBITDA in 2026 as compared to 2024 guidance for the Crude Oil segment Bolt-on Acquisitions Plains acquired an additional 10% interest in Saddlehorn Pipeline Company and a Mid-Con terminal asset for aggregate cash consideration of approximately $110 million enhancing Plains' position in the Rockies and Mid-Con "This marks a solid start to the year as we are on-track to deliver against our full-year plan and our bolt-on M&A strategy continues to prove successful with complementary transactions enhancing our footprint in the Rockies and Mid-Con," said Willie Chiang, Chairman and CEO of Plains. "Separately, we successfully extended the duration of our Permian long-haul portfolio, including Cactus I. This represents a major milestone and provides greater clarity on the outlook for our long-haul assets. Better visibility around re-contracting combined with our disciplined operational and financial performance should provide investors with greater confidence in the outlook for the business and our ability to continue generating significant free cash flow for years to come." Plains All American Pipeline Summary Financial Information (unaudited)(in millions, except per unit data)     Three Months EndedMarch 31,   % GAAP Results   2024   2023   Change Net income attributable to PAA   $ 266   $ 422   (37 )% Diluted net income per common unit   $ 0.29   $ 0.52   (44 )% Diluted weighted average common units outstanding     701     698   — % Net cash provided by operating activities   $ 419   $ 743   (44 )% Distribution per common unit declared for the period   $ 0.3175   $ 0.2675   19 %     Three Months EndedMarch 31,   % Non-GAAP Results (1)    2024      2023   Change Adjusted net income attributable to PAA   $ 354     $ 344   3 % Diluted adjusted net income per common unit   $ 0.41     $ 0.41   — % Adjusted EBITDA   $ 847     $ 813   4 % Adjusted EBITDA attributable to PAA (2)   $ 718     $ 715   — % Implied DCF per common unit and common unit equivalent   $ 0.67     $ 0.62   8 % Adjusted Free Cash Flow   $ 70     $ 823   (91 )% Adjusted Free Cash Flow after Distributions   $ (217 )   $ 581   **   Adjusted Free Cash Flow (Excluding Changes in Assets & Liabilities)   $ 262     $ 625   (58 )% Adjusted Free Cash Flow after Distributions (Excluding Changes in Assets & Liabilities)   $ (25 )   $ 383   **     **      Indicates that variance as a percentage is not meaningful. (1)   See the section of this release entitled "Non-GAAP Financial Measures and Selected Items Impacting Comparability" and the tables attached hereto for information regarding our Non-GAAP financial measures, including their reconciliation to the most directly comparable measures as reported in accordance with GAAP, and certain selected items that PAA believes impact comparability of financial results between reporting periods. (2)   Excludes amounts attributable to noncontrolling interests in the Plains Oryx Permian Basin LLC joint venture, Cactus II Pipeline LLC and Red River Pipeline LLC.       Summary of Selected Financial Data by Segment (unaudited)(in millions)   Segment Adjusted EBITDA   Crude Oil   NGL Three Months Ended March 31, 2024 $ 553     $ 159   Three Months Ended March 31, 2023 $ 517     $ 192   Percentage change in Segment Adjusted EBITDA versus 2023 period   7 %     (17 )% First-quarter 2024 Crude Oil Segment Adjusted EBITDA increased 7% versus comparable 2023 results primarily due to higher tariff volumes on our pipelines, tariff escalations and contributions from acquisitions. These items were partially offset by fewer market based opportunities. First-quarter 2024 NGL Segment Adjusted EBITDA decreased 17% versus comparable 2023 results primarily due to lower realized frac spreads. Plains GP Holdings PAGP owns an indirect non-economic controlling interest in PAA's general partner and an indirect limited partner interest in PAA. As the control entity of PAA, PAGP consolidates PAA's results into its financial statements, which is reflected in the condensed consolidating balance sheet and income statement tables attached hereto. Conference Call and Webcast Instructions PAA and PAGP will hold a joint conference call at 9:00 a.m. CT on Friday, May 3, 2024 to discuss first-quarter performance and related items. To access the internet webcast, please go to https://edge.media-server.com/mmc/p/cr79phyy/  Alternatively, the webcast can be accessed on our website (www.plains.com) under Investor Relations (Navigate to: Investor Relations / either "PAA" or "PAGP" / News & Events / Events & Presentations). Following the live webcast, an audio replay will be available on our website and will be accessible for a period of 365 days. Slides will be posted prior to the call at the above referenced website. Non-GAAP Financial Measures and Selected Items Impacting Comparability To supplement our financial information presented in accordance with GAAP, management uses additional measures known as "non-GAAP financial measures" in its evaluation of past performance and prospects for the future and to assess the amount of cash that is available for distributions, debt repayments, common equity repurchases and other general partnership purposes. The primary additional measures used by management are Adjusted EBITDA, Adjusted EBITDA attributable to PAA, Implied Distributable Cash Flow ("DCF"), Adjusted Free Cash Flow and Adjusted Free Cash Flow after Distributions. Our definition and calculation of certain non-GAAP financial measures may not be comparable to similarly-titled measures of other companies. Adjusted EBITDA, Adjusted EBITDA attributable to PAA, Implied DCF and certain other non-GAAP financial performance measures are reconciled to Net Income, and Adjusted Free Cash Flow, Adjusted Free Cash Flow after Distributions and certain other non-GAAP financial liquidity measures are reconciled to Net Cash Provided by Operating Activities (the most directly comparable measures as reported in accordance with GAAP) for the historical periods presented in the tables attached to this release, and should be viewed in addition to, and not in lieu of, our Consolidated Financial Statements and accompanying notes. In addition, we encourage you to visit our website at www.plains.com (in particular the section under "Financial Information" entitled "Non-GAAP Reconciliations" within the Investor Relations tab), which presents a reconciliation of our commonly used non-GAAP and supplemental financial measures. We do not reconcile non-GAAP financial measures on a forward-looking basis as it is impractical to do so without unreasonable effort. Non-GAAP Financial Performance Measures Adjusted EBITDA is defined as earnings before interest expense, income tax (expense)/benefit, depreciation and amortization (including our proportionate share of depreciation and amortization, including write-downs related to cancelled projects and impairments, of unconsolidated entities), gains and losses on asset sales and asset impairments and gains or losses on investments in unconsolidated entities, adjusted for certain selected items impacting comparability. Adjusted EBITDA attributable to PAA excludes the portion of Adjusted EBITDA that is attributable to noncontrolling interests. Management believes that the presentation of Adjusted EBITDA, Adjusted EBITDA attributable to PAA and Implied DCF provides useful information to investors regarding our performance and results of operations because these measures, when used to supplement related GAAP financial measures, (i) provide additional information about our core operating performance and ability to fund distributions to our unitholders through cash generated by our operations and (ii) provide investors with the same financial analytical framework upon which management bases financial, operational, compensation and planning/budgeting decisions. We also present these and additional non-GAAP financial measures, including adjusted net income attributable to PAA and basic and diluted adjusted net income per common unit, as they are measures that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations. These non-GAAP financial performance measures may exclude, for example, (i) charges for obligations that are expected to be settled with the issuance of equity instruments, (ii) gains and losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), gains and losses on derivatives that are either related to investing activities (such as the purchase of linefill) or purchases of long-term inventory, and inventory valuation adjustments, as applicable, (iii) long-term inventory costing adjustments, (iv) items that are not indicative of our core operating results and/or (v) other items that we believe should be excluded in understanding our core operating performance. These measures may be further adjusted to include amounts related to deficiencies associated with minimum volume commitments whereby we have billed the counterparties for their deficiency obligation and such amounts are recognized as deferred revenue in "Other current liabilities" in our Condensed Consolidated Financial Statements. We also adjust for amounts billed by our equity method investees related to deficiencies under minimum volume commitments. Such amounts are presented net of applicable amounts subsequently recognized into revenue. Furthermore, the calculation of these measures contemplates tax effects as a separate reconciling item, where applicable. We have defined all such items as "selected items impacting comparability." Due to the nature of the selected items, certain selected items impacting comparability may impact certain non-GAAP financial measures, referred to as adjusted results, but not impact other non-GAAP financial measures. We do not necessarily consider all of our selected items impacting comparability to be non-recurring, infrequent or unusual, but we believe that an understanding of these selected items impacting comparability is material to the evaluation of our operating results and prospects. Although we present selected items impacting comparability that management considers in evaluating our performance, you should also be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, exchange rates, mechanical interruptions, acquisitions, divestitures, investment capital projects and numerous other factors. These types of variations may not be separately identified in this release, but will be discussed, as applicable, in management's discussion and analysis of operating results in our Quarterly Report on Form 10-Q. Non-GAAP Financial Liquidity Measures Management uses the non-GAAP financial liquidity measures Adjusted Free Cash Flow and Adjusted Free Cash Flow after Distributions to assess the amount of cash that is available for distributions, debt repayments, common equity repurchases and other general partnership purposes. Adjusted Free Cash Flow is defined as Net Cash Provided by Operating Activities, less Net Cash Provided by/(Used in) Investing Activities, which primarily includes acquisition, investment and maintenance capital expenditures, investments in unconsolidated entities and the impact from the purchase and sale of linefill, net of proceeds from the sales of assets and further impacted by distributions to and contributions from noncontrolling interests. Adjusted Free Cash Flow is further reduced by cash distributions paid to our preferred and common unitholders to arrive at Adjusted Free Cash Flow after Distributions. We also present these measures and additional non-GAAP financial liquidity measures as they are measures that investors have indicated are useful. We present the Adjusted Free Cash Flow (Excluding Changes in Assets & Liabilities) for use in assessing our underlying business liquidity and cash flow generating capacity excluding fluctuations caused by timing of when amounts earned or incurred were collected, received or paid from period to period. Adjusted Free Cash Flow (Excluding Changes in Assets & Liabilities) is defined as Adjusted Free Cash Flow excluding the impact of "Changes in assets and liabilities, net of acquisitions" on our Condensed Consolidated Statements of Cash Flows. Adjusted Free Cash Flow (Excluding Changes in Assets & Liabilities) is further reduced by cash distributions paid to our preferred and common unitholders to arrive at Adjusted Free Cash Flow after Distributions (Excluding Changes in Assets & Liabilities). PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY (unaudited)           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in millions, except per unit data)   Three Months EndedMarch 31,    2024     2023  REVENUES $ 11,995     $ 12,341           COSTS AND EXPENSES       Purchases and related costs   10,917       11,323   Field operating costs   358       357   General and administrative expenses   96       86   Depreciation and amortization   254       256   (Gains)/losses on asset sales, net   —       (154 ) Total costs and expenses   11,625       11,868           OPERATING INCOME   370       473           OTHER INCOME/(EXPENSE)       Equity earnings in unconsolidated entities   95       89   Interest expense, net   (95 )     (98 ) Other income/(expense), net   (5 )     64           INCOME BEFORE TAX   365       528   Current income tax expense   (53 )     (61 ) Deferred income tax benefit   39       8           NET INCOME   351       475   Net income attributable to noncontrolling interests   (85 )     (53 ) NET INCOME ATTRIBUTABLE TO PAA $ 266     $ 422           NET INCOME PER COMMON UNIT:       Net income allocated to common unitholders — Basic and Diluted $ 203     $ 361   Basic and diluted weighted average common units outstanding   701       698   Basic and diluted net income per common unit $ 0.29     $ 0.52     PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY (unaudited)           CONDENSED CONSOLIDATED BALANCE SHEET DATA(in millions)   March 31,2024   December 31,2023 ASSETS       Current assets (including Cash and cash equivalents of $331 and $450, respectively) $ 5,001   $ 4,913 Property and equipment, net   15,671     15,782 Investments in unconsolidated entities   2,878     2,820 Intangible assets, net   1,807     1,875 Linefill   981     976 Long-term operating lease right-of-use assets, net   298     313 Long-term inventory   299     265 Other long-term assets, net   421     411 Total assets $ 27,356   $ 27,355         LIABILITIES AND PARTNERS' CAPITAL       Current liabilities $ 5,144   $ 5,003 Senior notes, net   7,244     7,242 Other long-term debt, net   64     63 Long-term operating lease liabilities   261     274 Other long-term liabilities and deferred credits   997     1,041 Total liabilities   13,710     13,623         Partners' capital excluding noncontrolling interests   10,339     10,422 Noncontrolling interests   3,307     3,310 Total partners' capital   13,646     13,732 Total liabilities and partners' capital $ 27,356   $ 27,355 DEBT CAPITALIZATION RATIOS(in millions)   March 31,2024   December 31,2023 Short-term debt $ 554     $ 446   Long-term debt   7,308       7,305   Total debt $ 7,862     $ 7,751           Long-term debt $ 7,308     $ 7,305   Partners' capital excluding noncontrolling interests   10,339       10,422   Total book capitalization excluding noncontrolling interests ("Total book capitalization") $ 17,647     $ 17,727   Total book capitalization, including short-term debt $ 18,201     $ 18,173           Long-term debt-to-total book capitalization   41 %     41 % Total debt-to-total book capitalization, including short-term debt   43 %     43 %                 PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY (unaudited)           COMPUTATION OF BASIC AND DILUTED NET INCOME PER COMMON UNIT (1)(in millions, except per unit data)   Three Months EndedMarch 31,    2024     2023  Basic and Diluted Net Income per Common Unit       Net income attributable to PAA $ 266     $ 422   Distributions to Series A preferred unitholders   (44 )     (42 ) Distributions to Series B preferred unitholders   (19 )     (18 ) Amounts allocated to participating securities   (1 )     (2 ) Other   1       1   Net income allocated to common unitholders $ 203     $ 361           Basic and diluted weighted average common units outstanding (2) (3)   701       698           Basic and diluted net income per common unit $ 0.29     $ 0.52     (1)   We calculate net income allocated to common unitholders based on the distributions pertaining to the current period's net income. After adjusting for the appropriate period's distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to common unitholders and participating securities in accordance with the contractual terms of our partnership agreement in effect for the period and as further prescribed under the two-class method. (2)   The possible conversion of our Series A preferred units was excluded from the calculation of diluted net income per common unit for each of the three months ended March 31, 2024 and 2023 as the effect was antidilutive. (3)   Our equity-indexed compensation plan awards that contemplate the issuance of common units are considered dilutive unless (i) they become vested only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. Equity-indexed compensation plan awards that are deemed to be dilutive are reduced by a hypothetical common unit repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB.       PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY (unaudited)           CONDENSED CONSOLIDATED CASH FLOW DATA(in millions)   Three Months EndedMarch 31,    2024     2023  CASH FLOWS FROM OPERATING ACTIVITIES       Net income $ 351     $ 475   Reconciliation of net income to net cash provided by operating activities:       Depreciation and amortization   254       256   (Gains)/losses on asset sales, net   —       (154 ) Deferred income tax benefit   (39 )     (8 ) Equity earnings in unconsolidated entities   (95 )     (89 ) Distributions on earnings from unconsolidated entities   132       108   Other   8       (43 ) Changes in assets and liabilities, net of acquisitions   (192 )     198   Net cash provided by operating activities   419       743           CASH FLOWS FROM INVESTING ACTIVITIES       Net cash provided by/(used in) investing activities   (261 )     158           CASH FLOWS FROM FINANCING ACTIVITIES       Net cash used in financing activities   (273 )     (776 )         Effect of translation adjustment   (4 )     —           Net increase/(decrease) in cash and cash equivalents and restricted cash   (119 )     125           Cash and cash equivalents and restricted cash, beginning of period   450       401   Cash and cash equivalents and restricted cash, end of period $ 331     $ 526   CAPITAL EXPENDITURES(in millions)   Net to PAA (1)   Consolidated   Three Months EndedMarch 31,   Three Months EndedMarch 31,   2024   2023   2024   2023 Investment capital expenditures:               Crude Oil $ 65   $ 50   $ 90