Investor Presentation
Second-Quarter 2024
Forward-Looking Statements & Non-GAAP Financial Measures Disclosure
- This presentation contains forward-looking statements, including, in particular, statements about the performance, plans, strategies and objectives for future operations of Plains All American Pipeline, L.P. ("PAA") and Plains GP Holdings, L.P. ("PAGP"). These forward-looking statements are based on PAA's current views with respect to future events, based on what we believe to be reasonable assumptions. PAA and PAGP can give no assurance that future results or outcomes will be achieved. Important factors, some of which may be beyond PAA's and PAGP's control, that could cause actual results or outcomes to differ materially from the results or outcomes anticipated in the forward-looking statements are disclosed in PAA's and PAGP's respective filings with the Securities and Exchange Commission.
- This presentation also contains non-GAAP financial measures relating to PAA, such as Adjusted EBITDA attributable to PAA, Implied DCF and Adjusted Free Cash Flow measures. A reconciliation of these historical measures to the most directly comparable GAAP measures is available in the Investor Relations section of PAA's and PAGP's website at www.plains.com, select "PAA" or "PAGP," navigate to the "Financial Information" tab, then click on "Non-GAAP Reconciliations." PAA does not provide a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures on a forward-looking basis as it is impractical to forecast certain items that it has defined as "Selected Items Impacting Comparability" without unreasonable effort. Definitions for certain non-GAAP financial measures and other terms used throughout this presentation are included in the appendix.
Investor Contacts
Blake Fernandez
Vice President, Investor Relations
Blake.Fernandez@plains.com
Michael Gladstein
Director, Investor Relations
Michael.Gladstein@plains.com
Investor Relations
866-809-1291plainsIR@plains.com
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Financial & Operating Profile
Large, integrated asset footprint; investment grade; attractive yield
Financial Profile | ||
~$23B | ~7.5% | $1.55B |
Enterprise | Distribution | Adj. Free Cash |
Flow(2) | ||
Value | Yield | (1) |
(ex. changes in Assets & Liabilities) | ||
Investment Grade Credit Rating
Operating Profile
>8 MMb/d | >6 MMb/d | >1 MMb/d | |
Total Pipeline | Permian Pipeline | Crude Purchase | |
Tariff Volume | Tariff Volume | Volume | |
~135 MMb/mo | ~170 Mb/d | ~6 Bcf/d | |
Liquids Storage | NGL Fractionation | Straddle | |
Capacity (3) | Capacity | Capacity | |
2024(G): Furnished May 3, 2024. Financial & operating data as of 3/31/2024. EV based on closing unit price as of 5/3/2024. Please visit our websitefor a reconciliation of Non-GAAP financial measures. | 3 | ||
(1) Distribution yield based on closing unit price as of 5/3/2024 & annualized distribution amount of $1.27/unit. (2) 2024(G); Includes $110MM of bolt-on acquisitions. (3) Includes crude storage capacity, above-ground tank capacity & NGL storage. |
Critical Crude & NGL Infrastructure
Full-service supply aggregation, quality segregation, flow assurance, access to multiple markets
Crude Oil Activities
+/- 15%
NGL
NGL Activities
2024(G) Adj. EBITDA +/- 85% $2.625 - $2.725B Crude Oil
2024(G): Furnished May 3, 2024. Non-rangebound metrics align with midpoint of Adj. EBITDA attributable to PAA; amounts intended to be +/-. | 4 |
Plains' Structure & Tax Attributes
Dual securities provide flexibility & optionality
Summary Ownership Structure(1)
PAA GP HOLDINGS LLC (PAGP GP)
(Unified Board of Directors)
(Nasdaq: PAGP) 1099 SECURITY
-
Indirect owner of PAA GP interest (non-economic)
and ~25% PAA LP interest(2)
GOVERNANCE OVERVIEW
Unified Board | Directors | 75% of |
responsible | subject to | Directors are |
for PAGP & PAA | Public Election(3) | independent |
PAGP TAX ATTRIBUTES
1099 | +/- $1.3B | Distributions | Expect no corp. |
Security | deferred tax asset | treated as | income taxes |
(Subject to tax as a Corp.) | (~$6.30 / Class A Share(4)) | "return of capital"(5) | for >10 years |
(Nasdaq: PAA) K-1 SECURITY
Public Investors • Series A & B Preferred
• 100% of Plains' assets & operations
PAA TAX ATTRIBUTES
Treated as | Distributions | "Pass through" |
partnership for tax | treated as | |
tax attributes(6) | ||
purposes; K-1 security | "Return of Capital" |
(1) | See PAGP 10-K for more detailed ownership structure overview. (2) | Excludes ~5% PAA LP interest indirectly owned by private owners through intermediate entity. (3) Staggered board with elections on a 3-year rolling basis. | 5 |
(4) | Illustrative based on 3/31/24 PAGP Class A Shares outstanding. (5) | Until there are positive earnings & profits for tax purposes (estimated timing 6+ years); thereafter distributions treated as dividends or capital gain. (6) K-1 allocates income / (loss) to owners. |
Plains' Investment Opportunity
Generating multi-year Free Cash Flow & increasing returns of capital to equity holders
Attractive Distribution Yield(1) of ~7.5%
Meaningful coverage, targeting multi-year distribution growth
Significant Adj. Free Cash Flow(2)
2024(G): +/- $1.55B Adj. FCF / $390MM Adj. FCFaD
Balance Sheet Strength
Long-Term Leverage Ratio Target Range 3.25x-3.75x
Strategically Located in Growth Basins
Premier North American Crude & Canadian NGL Assets
2024(G): Furnished May 3, 2024. (1) Distribution yield based on closing unit price as of 5/3/24. (2) Excluding changes in Assets & Liabilities; includes $110 million of bolt-on acquisitions. | 6 |
Leading Distribution Yield Across Sectors
Targeting multi-year, sustainable distribution growth
Distribution
Yield (3)
~7.5%
3.6%
Distribution / Dividend Yield (1)
Distribution Growth
Estimates (2)
Wells Fargo Research
+10.4% |
3.2%
3.1%
2.5%
1.9%
1.6%
1.5%
1.5%
1.3%
0.8%
0.8%
0.7%
+5.1% |
Real | Energy | Utes | Cons. | Materials Financials Health Industrials | S&P | Cons. | Comm. | Tech. |
Estate | Staples | Care | 500 | Disc | Services |
S&P 500 Sectors
(1) Source: FactSet as of 5/3/2024. (2) Source: Wells Fargo Securities, LLC estimates.
(3) Pro forma distribution yield based on closing unit price as of 5/3/2024 & annualized distribution amount of $1.27/unit.
MLPs |
3-Yr Forward CAGR
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Macro Fundamentals & Asset Overview
NASDAQ: PAA & PAGP
World Needs "All of the Above" Sources of Energy
Traditional energy sources account for >80% of primary global energy consumption
>10 Billion
In 2100
9.7 Billion
In 2050
180,000
160,000
140,000
120,000
Historical Energy Transition Considerations
- Most shifts lasted over a century or longer
- Requires significant investment of capital & talent (people)
Other
Nuclear
Hydro
Nat Gas
7.9 Billion
In 2022
5.0 Billion
100,000
80,000
60,000
40,000
20,000
Crude Oil
Coal
In 1987
2.5 Billion
In 1950
Forecast
- | Solid Fuels | |||||||||||||
1900 | 1950 | 2000 | 2050 | 2100 | ||||||||||
1900 | 1950 | 2000 | ||||||||||||
Global Primary Energy Consumption by Source (TWh) | Global Population (Blns) | |||||||||||||
Source: Energy Institute Statistical Review of World Energy (2023) | 9 |
Balancing Act Continues
OPEC+ cuts leading to observable draws in OECD Inventories
OPEC+ Production Cuts Balancing Global Markets(1)
Spare capacity has increased but who holds spare capacity may be more important
(Mb/d)
47,000
45,000
43,000
41,000
39,000
37,000
35,000
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
(1) Third party estimates of OPEC+ production (2) Kpler (includes SPR's).
OECD Inventories at Multi-Year Lows(2)
Despite significant SPR release
(MMbbls)
4,000
3,750
OECD Inventories ~225 MMbbls below 5 - year avg.
3,500
3,250
3,000
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
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Disclaimer
Plains All American Pipeline LP published this content on 15 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 12:32:37 UTC.