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PLAINS GP HOLDINGS, L.P.

(PAGP)
  Report
Delayed Nasdaq  -  04:00 2022-12-02 pm EST
13.00 USD   +0.31%
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PLAINS GP HOLDINGS LP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/09/2022 | 06:11am EST

Introduction


The following discussion is intended to provide investors with an understanding
of our financial condition and results of our operations and should be read in
conjunction with our historical Consolidated Financial Statements and
accompanying notes and Management's Discussion and Analysis of Financial
Condition and Results of Operations as presented in our 2021 Annual Report on
Form 10-K. For more detailed information regarding the basis of presentation for
the following financial information, see the Condensed Consolidated Financial
Statements and related notes that are contained in Part I, Item 1 of this
Quarterly Report on Form 10-Q.

Our discussion and analysis includes the following:

•Executive Summary

•Results of Operations

•Liquidity and Capital Resources

•Recent Accounting Pronouncements

•Forward-Looking Statements

Executive Summary

Company Overview

We are a Delaware limited partnership that has elected to be taxed as a
corporation for United States federal income tax purposes. As of June 30, 2022,
our sole cash-generating assets consisted of (i) a 100% managing member interest
in GP LLC and (ii) an approximate 81% limited partner interest in AAP through
our direct ownership of AAP units and indirect ownership of AAP units through GP
LLC, which also holds the non-economic general partner interest in AAP. As of
June 30, 2022, AAP directly owned a limited partner interest in PAA through its
ownership of approximately 241.5 million PAA common units (approximately 31% of
PAA's total outstanding common units and Series A preferred units combined). AAP
is the sole member of PAA GP, which holds the non-economic general partner
interest in PAA.

PAA's business model integrates large-scale supply aggregation capabilities with
the ownership and operation of critical midstream infrastructure systems that
connect major producing regions to key demand centers and export terminals. As
one of the largest midstream service providers in North America, we own an
extensive network of pipeline transportation, terminalling, storage and
gathering assets in key crude oil and NGL producing basins and transportation
corridors and at major market hubs in the United States and Canada. PAA's assets
and the services it provides are primarily focused on crude oil and NGL.

Segment Changes


During the fourth quarter of 2021, we reorganized our historical operating
segments into two operating segments: Crude Oil and NGL. Additionally, during
the fourth quarter of 2021, we modified our definition of Segment Adjusted
EBITDA to exclude amounts attributable to noncontrolling interests in
consolidated joint venture entities. See Note 20 to our Consolidated Financial
Statements included in Part IV of our 2021 Annual Report on Form 10-K for
additional information. All segment data and related disclosures for earlier
periods presented herein have been recast to reflect the new segment reporting
structure and the modification to our definition of Segment Adjusted EBITDA.
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Overview of Operating Results


During the first six months of 2022, we recognized net income of $448 million
compared to net income of $181 million recognized during the first six months of
2021. Results from our operations increased for the first six months of 2022
over the comparable 2021 period driven primarily by more favorable margins in
our NGL segment and increased earnings from higher volumes on our crude oil
pipelines. However, these items were partially offset by the impact from the
sale of our natural gas storage facilities in the third quarter of 2021 and
higher field operating costs in the 2022 period primarily from (i) an increase
in estimated costs associated with the Line 901 incident and (ii) gains related
to hedged power costs resulting from the extreme winter weather event that
occurred in February 2021 ("Winter Storm Uri") recognized in the first quarter
of 2021.

Results for the first six months of 2022 included a net gain on asset sales of
$46 million, compared to a net loss on asset sales and asset impairments of $370
million included in results for the first six months of 2021. The 2022 period
was also impacted by a loss on the mark-to-market adjustment of the Preferred
Distribution Rate Reset Option and higher income tax expense.

See the "Results of Operations" section below for further discussion.

Results of Operations

Consolidated Results

The following table sets forth an overview of our consolidated financial results calculated in accordance with GAAP (in millions, except per share data):

                                              Three Months Ended                                                            Six Months Ended
                                                   June 30,                            Variance                                 June 30,                            Variance
                                             2022               2021              $                %                     2022              2021                $                %
Product sales revenues                  $    16,007          $ 9,623          $ 6,384               66  %             $ 29,388          $ 17,706          $ 11,682               66  %
Services revenues                               352              307               45               15  %                  665               607                58               10  %
Purchases and related costs                 (15,324)          (9,277)          (6,047)             (65) %              (28,109)          (16,669)          (11,440)             (69) %
Field operating costs                          (307)            (252)             (55)             (22) %                 (653)             (471)             (182)             (39) %
General and administrative expenses             (80)             (74)              (6)              (8) %                 (163)             (142)              (21)             (15) %
Depreciation and amortization                  (243)            (197)             (46)             (23) %                 (475)             (375)             (100)             (27) %
Gains/(losses) on asset sales and asset
impairments, net                                  3             (369)             372              101  %                   46              (370)              416              112  %
Equity earnings in unconsolidated
entities                                        104               33               71              215  %                  201               121                80               66  %

Interest expense, net                           (99)            (107)               8                7  %                 (206)             (213)                7                3  %
Other income/(expense), net                    (118)              84             (202)                 **                 (155)               23              (178)                 **
Income tax (expense)/benefit                    (56)              17              (73)                 **                  (91)              (36)              (55)            (153) %
Net income/(loss)                               239             (212)             451              213  %                  448               181               267              148  %
Net (income)/loss attributable to
noncontrolling interests                       (208)             143             (351)            (245) %                 (395)             (180)             (215)            (119) %

Net income/(loss) attributable to PAGP $ 31 $ (69)

   $   100              145  %             $     53          $      1          $     52                  **

Basic and diluted net income/(loss) per
Class A share                           $      0.16          $ (0.35)         $  0.51              146  %             $   0.27          $      -          $   0.27                 N/A

Basic and diluted weighted average
Class A shares outstanding                      194              194                -                -  %                  194               194                 -                -  %




**  Indicates that variance as a percentage is not meaningful.


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Revenues and Purchases

Fluctuations in our consolidated revenues and purchases and related costs are
primarily associated with our merchant activities and generally explained in
large part by changes in commodity prices. Our crude oil and NGL merchant
activities are not directly affected by the absolute level of prices because the
commodities that we buy and sell are generally indexed to the same pricing
indices. Both product sales revenues and purchases and related costs will
fluctuate with market prices; however, the absolute margins related to those
sales and purchases will not necessarily have a corresponding increase or
decrease. Additionally, product sales revenues include the impact of gains and
losses related to derivative instruments used to manage our exposure to
commodity price risk associated with such sales and purchases.

The following table presents the range of the NYMEX WTI benchmark price of crude
oil (in dollars per barrel):

                                                             NYMEX WTI
                                                          Crude Oil Price
                                                    Low       High       Average
               Three Months Ended June 30, 2022   $  94      $ 122      $    109
               Three Months Ended June 30, 2021   $  59      $  74      $     66

               Six Months Ended June 30, 2022     $  76      $ 124      $    102
               Six Months Ended June 30, 2021     $  48      $  74      $     62


Product sales revenues and purchases increased for the three and six months ended June 30, 2022, compared to the same periods in 2021 primarily due to higher prices and volumes in the 2022 periods.


Revenues from services increased for the three and six months ended June 30,
2022, compared to the same periods in 2021 primarily due to higher prices and
volumes in the 2022 periods, partially offset by the impact of the sale of our
natural gas storage facilities in the third quarter of 2021.

See further discussion of our net revenues in the "-Analysis of Operating Segments" section below.

Field Operating Costs

See discussion of field operating costs in the "-Analysis of Operating Segments" section below.

General and Administrative Expenses


The increase in general and administrative expenses for the three and six months
ended June 30, 2022 compared to the same periods in 2021 was primarily due to
(i) employee-related costs, including an increase in equity-indexed compensation
expense on equity-classified awards (which is excluded in the calculation of
Adjusted EBITDA and Segment Adjusted EBITDA) due to changes in plan assumptions,
(ii) higher office rent due to an operating cost abatement in the prior year and
(iii) reduced wage subsidies received by our Canadian subsidiary in the current
periods. For the six months ended June 30, 2022, the increase was also
attributed to costs associated with the formation of the Permian JV, a portion
of which are transition related.

Gains/(Losses) on Asset Sales and Asset Impairments, Net

During the first quarter of 2022, we recognized a gain of $40 million related to the sale of land and buildings in California.

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The net loss on asset sales and asset impairments for 2021 primarily consisted
of (i) an approximate $475 million non-cash impairment charge related to the
write-down of our Pine Prairie and Southern Pines natural gas storage facilities
upon classification as held for sale during the second quarter (these assets
were sold in August 2021) and (ii) a gain of $106 million recognized in the
second quarter related to the asset exchange agreement (the "Asset Exchange")
involving the sale of one of our crude oil pipelines in Canada in exchange for
additional interests in certain Empress natural gas processing plants.

Depreciation and Amortization


The increase in depreciation and amortization expense for the three and six
months ended June 30, 2022 compared to the same periods in 2021 was driven by
depreciation expense on the assets contributed by Oryx Midstream Holdings LLC
("Oryx Midstream") upon formation of the Permian JV.

Other Income/(Expense), Net


The following table summarizes the components impacting Other income/(expense),
net (in millions):

                                                                  Three Months Ended                        Six Months Ended
                                                                       June 30,                                 June 30,
                                                                2022               2021                  2022                 2021

Gain/(loss) related to mark-to-market adjustment of Preferred Distribution Rate Reset Option (1)

               $      (103)         $     77          $     (147)              $      9
Net gain/(loss) on foreign currency revaluation (2)                (16)                6                  (9)                    13
Other                                                                1                 1                   1                      1
                                                           $      (118)         $     84          $     (155)              $     23



(1)See Note 8 to our Condensed Consolidated Financial Statements for additional information.


(2)The activity during the periods presented was primarily related to the impact
from the change in the United States dollar to Canadian dollar exchange rate on
the portion of our intercompany net investment that is not long-term in nature.

Income Tax (Expense)/Benefit

The net unfavorable income tax variance for the three and six months ended June 30, 2022 compared to the same periods in 2021 was primarily a result of increased income in our Canadian operations.

Non-GAAP Financial Measures


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. The primary
additional measures used by management are Adjusted EBITDA and Adjusted EBITDA
attributable to PAA.

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and
amortization (including our proportionate share of depreciation and
amortization, including write-downs related to cancelled projects, of
unconsolidated entities), gains and losses on asset sales and asset impairments,
goodwill impairment losses and gains on and impairments of investments in
unconsolidated entities, adjusted for certain selected items impacting
comparability. Our definition and calculation of certain non-GAAP financial
measures may not be comparable to similarly-titled measures of other companies.
Adjusted EBITDA and Adjusted EBITDA attributable to PAA are reconciled to Net
Income, the most directly comparable measure as reported in accordance with
GAAP, and should be viewed in addition to, and not in lieu of, our Condensed
Consolidated Financial Statements and accompanying notes.
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Management believes that the presentation of such additional financial measures
provides useful information to investors regarding our performance and results
of operations because these measures, when used to supplement related GAAP
financial measures, (i) provides additional information about our core operating
performance, (ii) provides investors with the same financial analytical
framework upon which management bases financial, operational, compensation and
planning/budgeting decisions and (iii) presents measures that investors, rating
agencies and debt holders have indicated are useful in assessing us and our
results of operations. These non-GAAP 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 further be 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. We have defined all such items as "selected items
impacting comparability." 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 as discussed, as applicable, in "-Analysis of Operating Segments."

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The following table sets forth the reconciliation of the non-GAAP financial
performance measures Adjusted EBITDA and Adjusted EBITDA attributable to PAA
from Net Income (in millions):

                                                    Three Months Ended                                                           Six Months Ended
                                                         June 30,                           Variance                                 June 30,                            Variance
                                                   2022             2021               $                %                      2022              2021               $                %

Net income/(loss)                              $     239          $ (212)         $    451              213  %             $     448          $   181          $    267              148  %
Interest expense, net                                 99             107                (8)              (7) %                   206              213                (7)              (3) %
Income tax expense/(benefit)                          56             (17)               73              429  %                    91               36                55              153  %
Depreciation and amortization                        243             197                46               23  %                   475              375               100               27  %
(Gains)/losses on asset sales and asset
impairments, net                                      (3)            369              (372)            (101) %                   (46)             370              (416)            (112) %

Depreciation and amortization of
unconsolidated entities (1)                           17              68               (51)             (75) %                    37               88               (51)             (58) %
Unallocated general and administrative
expenses (2)                                           2               2                 -                -  %                     3                3                 -                -  %
Selected Items Impacting Comparability:
(Gains)/losses from derivative
activities and inventory valuation
adjustments                                          (75)            163              (238)                 **                    13              (35)               48                  **
Long-term inventory costing adjustments              (13)            (27)               14                  **                  (105)             (68)              (37)                 **
Deficiencies under minimum volume
commitments, net                                      10               6                 4                  **                    15              (26)               41                  **
Equity-indexed compensation expense                    7               4                 3                  **                    15                9                 6                  **
Net (gain)/loss on foreign currency
revaluation                                            3              (1)                4                  **                     1               (2)                3                  **
Line 901 incident                                      -               -                 -                  **                    85                -                85                  **
Significant transaction-related expenses               -               3                (3)                 **                     -                3                (3)                 **
Selected Items Impacting Comparability -
Segment Adjusted EBITDA (3)                          (68)            148              (216)                 **                    24             (119)              143                  **
(Gains)/losses from derivative
activities (4)                                       103             (77)              180                  **                   147               (9)              156                  **
Net (gain)/loss on foreign currency
revaluation (5)                                       16              (6)               22                  **                     9              (13)               22                  **

Selected Items Impacting Comparability -
Adjusted EBITDA (6)                                   51              65               (14)                 **                   180             (141)              321                  **
Adjusted EBITDA (6)                            $     704          $  579          $    125               22  %             $   1,394          $ 1,125          $    269               24  %
Adjusted EBITDA attributable to
noncontrolling interests in consolidated
joint ventures (7)                                   (89)             (4)              (85)                 **                  (166)              (7)             (159)                 **
Adjusted EBITDA attributable to PAA            $     615          $  575          $     40                7  %             $   1,228          $ 1,118          $    110               10  %




**  Indicates that variance as a percentage is not meaningful.

(1)We exclude our proportionate share of the depreciation and amortization expense (including write-downs related to cancelled projects) of such unconsolidated entities when reviewing Adjusted EBITDA, similar to our consolidated assets.


(2)Represents general and administrative expenses incremental to those of PAA,
which are not allocated to our reporting segments in determining Segment
Adjusted EBITDA and are excluded in the non-GAAP financial performance measures
utilized by management.

(3)For a more detailed discussion of these selected items impacting comparability, see the footnotes to the Segment Adjusted EBITDA Reconciliation table in Note 11 to our Condensed Consolidated Financial Statements.

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(4)The Preferred Distribution Rate Reset Option of PAA's Series A preferred
units is accounted for as an embedded derivative and recorded at fair value in
our Condensed Consolidated Financial Statements. The associated gains and losses
are not integral to our results and were thus classified as a selected item
impacting comparability. See Note 8 to our Condensed Consolidated Financial
Statements for additional information regarding the Preferred Distribution Rate
Reset Option.

(5)During the periods presented, there were fluctuations in the value of CAD to
USD, resulting in the realization of foreign exchange gains and losses on the
settlement of foreign currency transactions as well as the revaluation of
monetary assets and liabilities denominated in a foreign currency. The
associated gains and losses are not integral to our results and were thus
classified as a selected item impacting comparability.

(6)Other income/(expense), net per our Condensed Consolidated Statements of
Operations, adjusted for selected items impacting comparability ("Adjusted Other
income/(expense), net") is included in Adjusted EBITDA and excluded from Segment
Adjusted EBITDA.

(7)Reflects amounts attributable to noncontrolling interests in the Permian JV and Red River LLC.

Analysis of Operating Segments


We manage our operations through two operating segments: Crude Oil and NGL. Our
CODM (our Chief Executive Officer) evaluates segment performance based on a
variety of measures including Segment Adjusted EBITDA, segment volumes and
maintenance capital investment. See Note 11 to our Condensed Consolidated
Financial Statements for our definition of Segment Adjusted EBITDA and a
reconciliation of Segment Adjusted EBITDA to Net income attributable to PAGP.
See Note 20 to our Consolidated Financial Statements included in Part IV of our
2021 Annual Report on Form 10-K for our definition of maintenance capital.

Crude Oil Segment


Our Crude Oil segment operations generally consist of gathering and transporting
crude oil using pipelines, gathering systems, trucks and at times on barges or
railcars, in addition to providing terminalling, storage and other
facilities-related services utilizing our integrated assets across the United
States and Canada. Our assets serve third parties and are also supported by our
merchant activities. Our merchant activities include the purchase of crude oil
supply and the movement of this supply on primarily our assets to sales
locations, including our terminals, third-party connecting carriers, regional
hubs or to refineries. Our merchant activities are subject to our risk
management policies and may include the use of derivative instruments to hedge
our exposure.

Our Crude Oil segment generates revenue through a combination of tariffs,
pipeline capacity agreements and other transportation fees, month-to-month and
multi-year storage and terminalling agreements and the sale of gathered and
bulk-purchased crude oil. Tariffs and other fees on our pipeline systems are
typically based on volumes transported and vary by receipt point and delivery
point. Fees for our terminalling and storage services are based on capacity
leases and throughput volumes. Generally, results from our merchant activities
are impacted by (i) increases or decreases in our lease gathering crude oil
purchases volumes and (ii) the overall strength, weakness and volatility of
market conditions, including regional differentials and time spreads. In
addition, the execution of our risk management strategies in conjunction with
our assets can provide upside in certain markets. The segment results also
include the direct fixed and variable field costs of operating the crude oil
assets, as well as an allocation of indirect operating costs.

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The following tables set forth our operating results from our Crude Oil segment:

                                               Three Months Ended                                                            Six Months Ended
Operating Results (1)                               June 30,                            Variance                                 June 30,                            Variance
(in millions)                                 2022               2021              $                %                     2022              2021                $                %
Revenues                                 $    15,940          $ 9,779          $ 6,161               63  %             $ 29,019          $ 17,632          $ 11,387               65  %
Purchases and related costs                  (15,163)          (9,127)          (6,036)             (66) %              (27,556)          (16,174)          (11,382)             (70) %
Field operating costs                           (233)            (203)             (30)             (15) %                 (515)             (368)             (147)             (40) %
Segment general and administrative
expenses (2)                                     (59)             (54)              (5)              (9) %                 (122)             (104)              (18)             (17) %
Equity earnings in unconsolidated
entities                                         104               33               71              215  %                  201               121                80               66  %

Adjustments (3):
Depreciation and amortization of
unconsolidated entities                           17               68              (51)             (75) %                   37                88               (51)             (58) %
(Gains)/losses from derivative
activities and inventory valuation
adjustments                                      (29)              76             (105)            (138) %                   30               (83)              113              136  %
Long-term inventory costing
adjustments                                      (13)             (27)              14               52  %                  (98)              (62)              (36)             (58) %
Deficiencies under minimum volume
commitments, net                                  10                6                4               67  %                   15               (26)               41              158  %
Equity-indexed compensation
expense                                            7                4                3               75  %                   15                 9                 6               67  %
Net (gain)/loss on foreign
currency revaluation                               2               (1)               3              300  %                    1                (2)                3              150  %
Line 901 incident                                  -                -                -                 N/A                   85                 -                85                 N/A
Significant transaction-related
expenses                                           -                3               (3)            (100) %                    -                 3                (3)            (100)
Adjusted EBITDA attributable to
noncontrolling interests in
consolidated joint ventures                      (89)              (4)             (85)                 **                 (166)               (7)             (159)                 **
Segment Adjusted EBITDA                  $       494          $   553          $   (59)             (11) %             $    946          $  1,027          $    (81)              (8) %

Maintenance capital                      $        25          $    23          $     2                9  %             $     45          $     52          $     (7)             (13) %


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                                           Three Months Ended                                                                  Six Months Ended
                                                June 30,                               Variance                                    June 30,                              Variance
Average Volumes                         2022                 2021              Volumes               %                     2022                 2021             Volumes               %
Tariff activities volumes (4)
Crude oil pipelines tariff
volumes (by region):
Permian Basin (5)                      5,434                4,189                 1,245              30  %                5,324                3,972                1,352              34  %
South Texas / Eagle Ford (5)             338                  314                    24               8  %                  352                  317                   35              11  %
Mid-Continent (5)                        483                  467                    16               3  %                  478                  420                   58              14  %
Gulf Coast                               200                  159                    41              26  %                  198                  152                   46              30  %
Rocky Mountain (5)                       353                  327                    26               8  %                  350                  307                   43              14  %
Western                                  284                  256                    28              11  %                  259                  246                   13               5  %
Canada                                   325                  294                    31              11  %                  328                  305                   23               8  %
Crude oil pipelines tariff
activities total volumes               7,417                6,006                 1,411              23  %                7,289                5,719                1,570              27  %

Commercial crude oil storage
capacity (5) (6)                          72                   73                    (1)             (1) %                   72                   73                   (1)             (1) %

Crude oil lease gathering
purchases (4)                          1,368                1,352                    16               1  %                1,364                1,264                  100               8  %




**  Indicates that variance as a percentage is not meaningful.

(1)Revenues and costs and expenses include intersegment amounts.


(2)Segment general and administrative expenses reflect direct costs attributable
to each segment and an allocation of other expenses to the segments. The
proportional allocations by segment require judgment by management and are based
on the business activities that exist during each period.

(3)Represents adjustments included in the performance measure utilized by our CODM in the evaluation of segment results. See Note 11 to our Condensed Consolidated Financial Statements for additional discussion of such adjustments.


(4)Average daily volumes in thousands of barrels per day calculated as the total
volumes (attributable to our interest for pipelines owned by unconsolidated
entities or undivided joint interests) for the year divided by the number of
days in the year. Volumes associated with acquisitions represent total volumes
for the number of days we actually owned the assets divided by the number of
days in the period.

(5)Includes volumes (attributable to our interest) from assets owned by unconsolidated entities.

(6)Average monthly capacity in millions of barrels per day calculated as total volumes for the period divided by the number of months in the period.

Segment Adjusted EBITDA


Crude Oil Segment Adjusted EBITDA decreased for the three and six months ended
June 30, 2022 compared to the same periods in 2021 primarily due to (i) the sale
of our natural gas storage facilities in August of 2021 (which were reported in
our Crude Oil Segment) and (ii) the monetization of contango hedges that
benefited the 2021 periods. The six-month comparative period was further
impacted by gains related to hedged power costs resulting from Winter Storm Uri
recognized in the first quarter of 2021. These items were partially offset by
increased earnings in the first half of 2022 from higher volumes on our
pipelines and higher loss allowance revenue.

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The following is a more detailed discussion of the significant factors impacting
Segment Adjusted EBITDA for the three and six months ended June 30, 2022
compared to the same periods in 2021.

•Natural Gas Storage Assets. We sold our natural gas storage facilities in
August 2021, which was a significant driver of the decrease in our overall
results for 2022 compared to 2021. Net revenues from our natural gas storage
facilities were approximately $26 million for the three months ended June 30,
2021 and $68 million for the six months ended June 30, 2021, which included the
benefit of favorable margins from hub activities related to Winter Storm Uri, as
mentioned below.

•Market Opportunities. During the first half of 2021, we benefited from the
monetization of contango hedges and favorable crude oil differentials, which was
a significant driver of the unfavorable variance in our results year-over-year.
This unfavorable variance was partially offset by the sale of excess linefill in
a higher crude oil price environment during 2022.

•Tariff Activities. In October of 2021, we closed on the transaction with Oryx
Midstream to merge our respective Permian Basin assets, with the exception of
our long-haul pipeline systems and certain of our intra-basin assets, into the
Permian JV. The additional volumes from the pipelines contributed by Oryx
Midstream upon formation of the Permian JV were the most significant driver of
our volume growth year-over-year. We deduct the portion of the financial results
attributable to Oryx Midstream's 35% interest in the Permian JV in determining
Segment Adjusted EBITDA, which partially offset the favorable impact of the
volume growth when comparing Segment Adjusted EBITDA for the first half of 2022
compared to 2021.

•Pipeline Projects. The Capline pipeline reversal project and phase two of the
Wink to Webster pipeline project have been completed and were placed in service
in the first quarter of 2022, which favorably impacted equity earnings in
unconsolidated entities and our tariff volumes for the first half of 2022.

The variance in equity earnings in unconsolidated entities for the three and six
months ended June 30, 2022 compared to the same periods in 2021 was also driven
by the unfavorable impact to the prior periods of the recognition of our
proportionate share of the write-off of costs associated with a capital project
canceled during the second quarter of 2021 (which impacted equity earnings in
unconsolidated entities but is excluded from Segment Adjusted EBITDA and thus is
reflected as an "Adjustment" as "Depreciation and amortization of unconsolidated
entities" in the table above).

•Pipeline Loss Allowance Revenue. Pipeline loss allowance revenues increased for
the three and six months ended June 30, 2022 compared to the same periods in
2021 primarily due to higher prices and volumes during the 2022 periods.

•Winter Storm Uri. During the first quarter of 2021, Winter Storm Uri had a
negative impact on our volumes; however, this impact was more than offset during
the 2021 period by gains related to hedged power costs, which are reflected in
equity earnings and field operating costs, and favorable margins from hub
activities at our natural gas storage facilities resulting from Winter Storm
Uri.

•Minimum Volume Commitments. For the six months ended June 30, 2022 and 2021,
Segment Adjusted EBITDA includes approximately $98 million and $82 million,
respectively, associated with deficiencies under minimum volume commitments
under contracts that have make-up rights. Although the payments have been
received associated with the volume deficiencies, the revenues are not
recognized until future periods when either the shortfall is made up or when the
shipper's make-up rights expire or it is determined that their ability to
utilize the make-up right is remote. During the six months ended June 30, 2022
and 2021, we recognized approximately $83 million and $108 million,
respectively, associated with deficiencies under minimum volume commitments that
were previously deferred. The amount presented as an "Adjustment" in the table
above reflects the net adjustment for revenues deferred during the period and
the reversal of previously deferred revenues that were recognized during the
period. The net impact to Segment Adjusted EBITDA associated with deficiencies
under minimum volume commitments was not significant for the three month
comparative periods.
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•Field Operating Costs. The increase in field operating costs for the three and
six months ended June 30, 2022 compared to the same periods in 2021 was
primarily due to (i) incremental operating costs from the Permian JV, which were
partially offset by the divestiture of our natural gas storage facilities, (ii)
increased utilities as a result of higher volumes, (iii) increased trucking
costs resulting from higher third-party trucked volumes and diesel fuel prices
and (iv) a change in our estimate of remediation costs. For the six months ended
June 30, 2022, the increase compared to 2021 was also attributable to additional
estimated costs associated with the Line 901 incident (which impact field
operating costs but are excluded from Segment Adjusted EBITDA and thus are
reflected as an "Adjustment" in the table above) and the impact of gains related
to hedged power costs resulting from Winter Storm Uri recognized in the first
quarter of 2021.

Segment General and Administrative Expenses. See the "-Consolidated Results" section above for a discussion of general and administrative expenses.


Maintenance Capital. The decrease in maintenance capital spending for the six
months ended June 30, 2022 compared to the same period in 2021 was primarily due
to completion of certain projects.

NGL Segment


Our NGL segment operations involve natural gas processing and NGL fractionation,
storage, transportation and terminalling. Our NGL revenues are primarily derived
from a combination of (i) providing gathering, fractionation, storage, and/or
terminalling services to third-party customers for a fee, and (ii) extracting
NGL mix supply from the gas stream processed at our Empress straddle plant
facility as well as acquiring NGL mix supply, which mix supply is then
transported, stored and fractionated into finished products and sold to
customers.

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The following tables set forth our operating results from our NGL segment:

                                                                  Three Months Ended                                                            Six Months Ended
Operating Results (1)                                                  June 30,                           Variance                                  June 30,                             Variance
(in millions, except per barrel data)                            2022              2021              $                %                        2022               2021              $                %
Revenues                                                     $      570          $ 230          $    340              148  %             $    1,304             $ 869          $    435               50  %
Purchases and related costs                                        (312)          (229)              (83)             (36) %                   (823)             (683)             (140)             (20) %
Field operating costs                                               (74)           (49)              (25)             (51) %                   (138)             (103)              (35)             (34) %
Segment general and administrative expenses (2)                     (19)           (18)               (1)              (6) %                    (38)              (35)               (3)              (9) %

Adjustments (3):
(Gains)/losses from derivative activities and
inventory valuation adjustments                                     (46)            87              (133)            (153) %                    (17)               48               (65)            (135) %
Long-term inventory costing adjustments                               -              -                 -                 N/A                     (7)               (6)               (1)             (17) %

Net loss on foreign currency revaluation                              1              -                 1                 N/A                      -                 -                 -                 N/A
Segment Adjusted EBITDA                                      $      120          $  21          $     99              471  %             $      281             $  90          $    191              212  %

Maintenance capital                                          $       18          $  14          $      4               29  %             $       25             $  21          $      4               19  %



                                               Three Months Ended                                                                Six Months Ended
                                                    June 30,                              Variance                                   June 30,                             Variance
Average Volumes
(in thousands of barrels per day)
(4)                                         2022                 2021             Volumes               %                    2022                2021             Volumes               %
NGL fractionation                            137                 129                     8               6  %                 136                 136                    -               -  %

NGL pipeline tariff                          187                 181                     6               3  %                 182                 182                    -               -  %

NGL sales                                    101                 112                   (11)            (10) %                 134                 165                  (31)            (19) %



(1)Revenues and costs and expenses include intersegment amounts.


(2)Segment general and administrative expenses reflect direct costs attributable
to each segment and an allocation of other expenses to the segments. The
proportional allocations by segment require judgment by management and are based
on the business activities that exist during each period.

(3)Represents adjustments included in the performance measure utilized by our CODM in the evaluation of segment results. See Note 11 to our Condensed Consolidated Financial Statements for additional discussion of such adjustments.

(4)Average daily volumes are calculated as total volumes (attributable to our interest for pipelines and facilities in which we have undivided joint interests) for the period divided by the number of days in the period.

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Segment Adjusted EBITDA

NGL Segment Adjusted EBITDA increased for the three and six months ended June
30, 2022 compared to the same periods in 2021 primarily due to the favorable
impact of higher realized fractionation spreads between the price of natural gas
and the extracted NGL ("frac spreads") and higher NGL sales prices.

Significant variances in the components of Segment Adjusted EBITDA are discussed in more detail below.


Net Revenues. Net revenues from our NGL activities increased for the three and
six months ended June 30, 2022 compared to the same periods in 2021 primarily
due to higher realized frac spreads and higher NGL sales prices, partially
offset by lower NGL sales volumes due to a reduction in lower margin hub
activity. Additionally, net revenues for the 2022 periods compared to 2021
include the benefit of our increased ownership in the Empress straddle plants
effective June 2021 and higher product gains at certain of our NGL storage and
fractionation facilities.

Field Operating Costs. The increase in field operating costs for the three and
six months ended June 30, 2022 compared to the same periods in 2021 was
primarily due to increased power-related costs associated with (i) our increased
ownership in the Empress straddle plants, (ii) higher prices in the 2022
periods, and (iii) a reduction in unrealized mark-to-market gains in the second
quarter of 2022 (which impact our field operating costs but are excluded from
Segment Adjusted EBITDA and thus are reflected as an "Adjustment" in the table
above).

Maintenance Capital. The increase in maintenance capital spending for the three and six months ended June 30, 2022 compared to the same periods in 2021 was primarily due to timing of scheduled projects.

Liquidity and Capital Resources

General


On a consolidated basis, our primary sources of liquidity are (i) cash flow from
operating activities and (ii) borrowings under PAA's credit facilities or the
PAA commercial paper program. In addition, we may supplement these primary
sources of liquidity with proceeds from asset sales, and in the past have
utilized funds received from sales of equity and debt securities. Our primary
cash requirements include, but are not limited to, (i) ordinary course of
business uses, such as the payment of amounts related to the purchase of crude
oil, NGL and other products, other expenses and interest payments on outstanding
debt, (ii) investment and maintenance capital activities, (iii) acquisitions of
assets or businesses, (iv) repayment of principal on long-term debt and
(v) distributions to our Class A shareholders and noncontrolling interests. In
addition, we may use cash for repurchases of common equity. We generally expect
to fund our short-term cash requirements through cash flow generated from
operating activities and/or borrowings under the PAA commercial paper program or
PAA's credit facilities. In addition, we generally expect to fund our long-term
needs, such as those resulting from investment capital activities or
acquisitions and refinancing long-term debt, through a variety of sources
(either separately or in combination), which may include the sources mentioned
above as funding for short-term needs and/or the issuance of additional equity
or debt securities and the sale of assets.

As of June 30, 2022, although we had a working capital deficit of $212 million,
we had approximately $2.8 billion of liquidity available to meet our ongoing
operating, investing and financing needs, subject to continued covenant
compliance, as noted below (in millions):

                                                                                       As of
                                                                                   June 30, 2022
Availability under PAA senior unsecured revolving credit facility (1) (2)        $        1,321
Availability under PAA senior secured hedged inventory facility (1) (2)                   1,345
Amounts outstanding under PAA commercial paper program                                     (115)
Subtotal                                                                                  2,551
Cash and cash equivalents                                                                   270
Total                                                                            $        2,821



(1)Represents availability prior to giving effect to borrowings outstanding under the PAA commercial paper program, which reduce available capacity under the facilities.

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(2)Available capacity under the PAA senior unsecured revolving credit facility
and the PAA senior secured hedged inventory facility was reduced by outstanding
letters of credit of $29 million and $5 million, respectively.

Usage of PAA's credit facilities, and, in turn, its commercial paper program, is
subject to ongoing compliance with covenants. The credit agreements for PAA's
revolving credit facilities (which impact PAA's ability to access its commercial
paper program because they provide the financial backstop that supports its
short-term credit ratings) and the indentures governing its senior notes contain
cross-default provisions. A default under PAA's credit agreements or indentures
would permit the lenders to accelerate the maturity of the outstanding debt.
Additionally, lack of compliance with the provisions in PAA's credit agreements
may restrict its ability to make distributions of available cash. PAA was in
compliance with the covenants contained in its credit agreements and indentures
as of June 30, 2022.

We believe that we have, and will continue to have, the ability to access the
PAA commercial paper program and credit facilities, which we use to meet our
short-term cash needs. We believe that our financial position remains strong and
we have sufficient liquid assets, cash flow from operating activities and
borrowing capacity under the credit agreements to meet our financial
commitments, debt service obligations, contingencies and anticipated capital
expenditures. We are, however, subject to business and operational risks that
could adversely affect our cash flow, including extended disruptions in the
financial markets and/or energy price volatility resulting from current
macroeconomic and geopolitical conditions associated with the COVID-19 pandemic
and/or actions by Organization of Petroleum Exporting Countries ("OPEC"). A
prolonged material decrease in our cash flows would likely produce an adverse
effect on our borrowing capacity and cost of borrowing. Our borrowing capacity
and borrowing costs are also impacted by PAA's credit rating. See Item 1A. "Risk
Factors" included in our 2021 Annual Report on Form 10-K for further discussion
regarding risks that may impact our liquidity and capital resources.

Cash Flow from Operating Activities

For a comprehensive discussion of the primary drivers of cash flow from operating activities, including the impact of varying market conditions and the timing of settlement of our derivatives, see Item 7. "Liquidity and Capital Resources-Cash Flow from Operating Activities" included in our 2021 Annual Report on Form 10-K.


Net cash provided by operating activities for the first six months of 2022 and
2021 was $1.129 billion and $1.023 billion, respectively, and primarily resulted
from earnings from our operations.

Investing Activities

Capital Expenditures


In addition to our operating needs, we also use cash for our investment capital
projects, maintenance capital activities and acquisition activities. We fund
these expenditures with cash generated by operating activities, financing
activities and/or proceeds from asset sales. In the near term, we do not plan to
issue common equity to fund such expenditures. The following table summarizes
our investment, maintenance and acquisition capital expenditures (in millions):

                                                    Six Months Ended
                                                        June 30,
                                                    2022            2021
                Investment capital (1) (2)    $     181            $ 142
                Maintenance capital (1)              70               73
                Acquisition capital                   -               32
                                              $     251            $ 247




(1)Capital expenditures made to expand the existing operating and/or earnings
capacity of our assets are classified as "Investment capital." Capital
expenditures for the replacement and/or refurbishment of partially or fully
depreciated assets in order to maintain the operating and/or earnings capacity
of our existing assets are classified as "Maintenance capital."

(2)Includes contributions to unconsolidated entities, accounted for under the equity method of accounting, related to investment capital projects by such entities.

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2022 Investment and Maintenance Capital. Total investment capital for the year
ended December 31, 2022 is projected to be approximately $330 million ($275
million net to our interest). Approximately half of our projected investment
capital expenditures are expected to be invested in the Permian JV assets.
Additionally, maintenance capital for the full year of 2022 is projected to be
$220 million ($210 million net to our interest). We expect to fund our 2022
investment and maintenance capital expenditures primarily with retained cash
flow.

Divestitures

Proceeds from the sale of assets have generally been used to fund our investment
capital projects and reduce debt levels. The following table summarizes the
proceeds received during the first six months of 2022 and 2021 from sales of
assets (in millions):

                                                         Six Months Ended
                                                             June 30,
                                                          2022            2021
               Proceeds from divestitures (1)      $     57              $ 22



(1)Represents proceeds, including working capital adjustments, net of transaction costs.

Ongoing Activities Related to Strategic Transactions


We are continuously engaged in the evaluation of potential transactions that
support our current business strategy. In the past, such transactions have
included the sale on non-core assets, the sale of partial interests in assets to
strategic joint venture partners, acquisitions and large investment capital
projects. With respect to a potential divestiture or acquisition, we may conduct
an auction process or participate in an auction process conducted by a third
party or we may negotiate a transaction with one or a limited number of
potential buyers (in the case of a divestiture) or sellers (in the case of an
acquisition). Such transactions could have a material effect on our financial
condition and results of operations.

We typically do not announce a transaction until after we have executed a
definitive agreement. In certain cases, in order to protect our business
interests or for other reasons, we may defer public announcement of a
transaction until closing or a later date. Past experience has demonstrated that
discussions and negotiations regarding a potential transaction can advance or
terminate in a short period of time. Moreover, the closing of any transaction
for which we have entered into a definitive agreement may be subject to
customary and other closing conditions, which may not ultimately be satisfied or
waived. Accordingly, we can give no assurance that our current or future efforts
with respect to any such transactions will be successful, and we can provide no
assurance that our financial expectations with respect to such transactions will
ultimately be realized. See Item 1A. "Risk Factors-Risks Related to PAA's
Business-Divestitures and acquisitions involve risks that may adversely affect
our business" included in our 2021 Annual Report on Form 10-K.

Financing Activities

Our financing activities primarily relate to funding investment capital projects, acquisitions and refinancing of our debt maturities, as well as short-term working capital (including borrowings for NYMEX and ICE margin deposits) and hedged inventory borrowings related to our NGL business and contango market activities.

Borrowings and Repayments Under Credit Arrangements


During the six months ended June 30, 2022, we had net borrowings under the PAA
credit facilities and commercial paper program of approximately $115 million.
The net borrowings resulted primarily from borrowings during the period related
to funding needs for capital investments, inventory purchases, senior notes
repayments and other general partnership purposes, partially offset by cash flow
from operating activities and proceeds from asset sales.

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During the six months ended June 30, 2021, we had net repayments on the PAA
credit facilities and commercial paper program of $326 million. The net
repayments resulted primarily from cash flow from operating activities and
proceeds from asset sales, which offset borrowings during the period related to
funding needs for capital investments, inventory purchases and other general
partnership purposes.

Repayment of Senior Notes

On March 1, 2022, PAA redeemed its 3.65%, $750 million senior notes due June 2022. PAA utilized cash on hand and borrowings under its commercial paper program to repay these senior notes.

Common Equity Repurchase Program


PAA repurchased 7.3 million and 5.3 million common units under the Program
through open market purchases that settled during the six months ended June 30,
2022 and 2021, respectively, for a total purchase price of $74 million and
$53 million, respectively, including commissions and fees. At June 30, 2022, the
remaining available capacity under the Program was $198 million.

Registration Statements


PAGP Registration Statements. We have filed with the SEC a shelf registration
statement that, subject to effectiveness at the time of use, allows us to issue,
in the aggregate, up to a specified amount of equity securities (the "PAGP
Traditional Shelf"), under which we had approximately $939 million of unsold
securities available at June 30, 2022. We also have access to a shelf
registration statement (the "PAGP WKSI Shelf"), which provides us with the
ability to offer and sell an unlimited amount of equity securities, subject to
market conditions and capital needs. We did not conduct any offerings under the
PAGP Traditional Shelf or the PAGP WKSI Shelf during the six months ended June
30, 2022.

PAA Registration Statements. PAA periodically accesses the capital markets for
both equity and debt financing. PAA has filed with the SEC a universal shelf
registration statement that, subject to effectiveness at the time of use, allows
PAA to issue, in the aggregate, up to a specified amount of debt or equity
securities (the "PAA Traditional Shelf"), under which PAA had approximately $1.1
billion of unsold securities available at June 30, 2022. PAA also has access to
a universal shelf registration statement (the "PAA WKSI Shelf"), which provides
it with the ability to offer and sell an unlimited amount of debt and equity
securities, subject to market conditions and capital needs. PAA did not conduct
any offerings under the PAA Traditional Shelf or the PAA WKSI Shelf during the
six months ended June 30, 2022.

Distributions to Our Class A Shareholders


We distribute all of our available cash within 55 days following the end of each
quarter to Class A shareholders of record. Available cash is generally defined
as all of our cash and cash equivalents on hand at the end of each quarter less
reserves established in the discretion of our general partner for future
requirements. Our levels of financial reserves are established by our general
partner and include reserves for the proper conduct of our business (including
future capital expenditures and anticipated credit needs), compliance with legal
or contractual obligations and funding of future distributions to our
shareholders. See Item 5. "Market for Registrant's Shares, Related Shareholder
Matters and Issuer Purchases of Equity Securities-Cash Distribution Policy"
included in our 2021 Annual Report on Form 10-K for additional discussion.

On August 12, 2022, we will pay a quarterly cash distribution of $0.2175 per
Class A share ($0.87 per share on an annualized basis) to shareholders of record
at the close of business on July 29, 2022 for the period from April 1, 2022
through June 30, 2022, which is unchanged from the distribution per share paid
in May of 2022.

See Note 7 to our Condensed Consolidated Financial Statements for details of distributions paid during or pertaining to the first six months of 2022.

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Distributions to Noncontrolling Interests

Distributions to noncontrolling interests represent amounts paid on interests in
consolidated entities that are not owned by us. As of June 30, 2022,
noncontrolling interests in our subsidiaries consisted of (i) limited partner
interests in PAA including a 69% interest in PAA's common units and PAA's Series
A preferred units combined and 100% of PAA's Series B preferred units, (ii) an
approximate 19% limited partner interest in AAP, (iii) a 35% interest in the
Permian JV and (iv) a 33% interest in Red River LLC.

On August 12, 2022, PAA will pay a quarterly cash distribution of $0.2175 per
common unit ($0.87 per unit on an annualized basis) to unitholders of record at
the close of business on July 29, 2022 for the period from April 1, 2022 through
June 30, 2022, which is unchanged from the distribution per unit paid in May of
2022.

See Note 7 to our Condensed Consolidated Financial Statements for details of
distributions paid to noncontrolling interests during the six months ended June
30, 2022.

Contingencies

For a discussion of contingencies that may impact us, see Note 10 to our Condensed Consolidated Financial Statements.

Commitments


Purchase Obligations. In the ordinary course of doing business, we purchase
crude oil and NGL from third parties under contracts, the majority of which
range in term from thirty-day evergreen to five years, with a limited number of
contracts with remaining terms extending up to 12 years. We establish a margin
for these purchases by entering into various types of physical and financial
sale and exchange transactions through which we seek to maintain a position that
is substantially balanced between purchases on the one hand and sales and future
delivery obligations on the other. We do not expect to use a significant amount
of internal capital to meet these obligations, as the obligations will be funded
by corresponding sales to entities that we deem creditworthy or who have
provided credit support we consider adequate.

The following table includes our best estimate of the amount and timing of these payments as well as other amounts due under the specified contractual obligations as of June 30, 2022 (in millions):

                                    Remainder of                                                                                   2027 and
                                        2022               2023              2024              2025              2026             Thereafter             Total
Crude oil, NGL and other purchases
(1)                                 $   15,162          $ 26,076          $ 24,981          $ 23,556          $ 22,154          $     67,795          $ 179,724




(1)Amounts are primarily based on estimated volumes and market prices based on
average activity during June 2022. The actual physical volume purchased and
actual settlement prices will vary from the assumptions used in the table.
Uncertainties involved in these estimates include levels of production at the
wellhead, weather conditions, changes in market prices and other conditions
beyond our control.


Letters of Credit. In connection with merchant activities, we provide certain
suppliers with irrevocable standby letters of credit to secure our obligation
for the purchase and transportation of crude oil, NGL and natural gas.
Additionally, we issue letters of credit to support insurance programs,
derivative transactions, including hedging-related margin obligations, and
construction activities. At June 30, 2022 and December 31, 2021, we had
outstanding letters of credit of approximately $34 million and $98 million,
respectively.

Recent Accounting Pronouncements

See Note 2 to our Condensed Consolidated Financial Statements.

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                           FORWARD-LOOKING STATEMENTS

All statements included in this report, other than statements of historical
fact, are forward-looking statements, including but not limited to statements
incorporating the words "anticipate," "believe," "estimate," "expect," "plan,"
"intend" and "forecast," as well as similar expressions and statements regarding
our business strategy, plans and objectives for future operations. The absence
of such words, expressions or statements, however, does not mean that the
statements are not forward-looking. Any such forward-looking statements reflect
our current views with respect to future events, based on what we believe to be
reasonable assumptions. Certain factors could cause actual results or outcomes
to differ materially from the results or outcomes anticipated in the
forward-looking statements. The most important of these factors include, but are
not limited to:

•our ability to pay distributions to our Class A shareholders;

•our expected receipt of, and amounts of, distributions from Plains AAP, L.P.;


•general economic, market or business conditions in the United States and
elsewhere (including the potential for a recession or significant slowdown in
economic activity levels, the risk of persistently high inflation and continued
supply chain issues, the impact of coronavirus variants on demand and growth,
and the timing, pace and extent of economic recovery) that impact (i) demand for
crude oil, drilling and production activities and therefore the demand for the
midstream services we provide and (ii) commercial opportunities available to us;

•declines in global crude oil demand and crude oil prices (whether due to the
COVID-19 pandemic, future pandemics or other factors) that correspondingly lead
to a significant reduction of North American crude oil and NGL production
(whether due to reduced producer cash flow to fund drilling activities or the
inability of producers to access capital, or both, the unavailability of
pipeline and/or storage capacity, the shutting-in of production by producers,
government-mandated pro-ration orders, or other factors), which in turn could
result in significant declines in the actual or expected volume of crude oil and
NGL shipped, processed, purchased, stored, fractionated and/or gathered at or
through the use of our assets and/or the reduction of commercial opportunities
that might otherwise be available to us;

•fluctuations in refinery capacity in areas supplied by our mainlines and other
factors affecting demand for various grades of crude oil and NGL and resulting
changes in pricing conditions or transportation throughput requirements;

•unanticipated changes in crude oil and NGL market structure, grade differentials and volatility (or lack thereof);


•the effects of competition and capacity overbuild in areas where we operate,
including downward pressure on rates and margins, contract renewal risk and the
risk of loss of business to other midstream operators who are willing or under
pressure to aggressively reduce transportation rates in order to capture or
preserve customers;

•negative societal sentiment regarding the hydrocarbon energy industry and the
continued development and consumption of hydrocarbons, which could influence
consumer preferences and governmental or regulatory actions that adversely
impact our business;

•environmental liabilities, litigation or other events that are not covered by an indemnity, insurance or existing reserves;


•the occurrence of a natural disaster, catastrophe, terrorist attack (including
eco-terrorist attacks) or other event that materially impacts our operations,
including cyber or other attacks on our electronic and computer systems;

•weather interference with business operations or project construction, including the impact of extreme weather events or conditions;


•the impact of current and future laws, rulings, governmental regulations,
executive orders, trade policies, accounting standards and statements, and
related interpretations, including legislation, executive orders or regulatory
initiatives that prohibit, restrict or regulate hydraulic fracturing or that
prohibit the development of oil and gas resources and the related infrastructure
on lands dedicated to or served by our pipelines;

•loss of key personnel and inability to attract and retain new talent;

•disruptions to futures markets for crude oil, NGL and other petroleum products, which may impair our ability to execute our commercial or hedging strategies;

•the effectiveness of our risk management activities;

•shortages or cost increases of supplies, materials or labor;

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•maintenance of PAA's credit rating and ability to receive open credit from our
suppliers and trade counterparties;

•tightened capital markets or other factors that increase our cost of capital or
limit our ability to obtain debt or equity financing on satisfactory terms to
fund additional acquisitions, investment capital projects, working capital
requirements and the repayment or refinancing of indebtedness;

•the successful operation of joint ventures and joint operating arrangements we
enter into from time to time, whether relating to assets operated by us or by
third parties, and the successful integration and future performance of acquired
assets or businesses;

•the availability of, and our ability to consummate, divestitures, joint ventures, acquisitions or other strategic opportunities;


•the refusal or inability of our customers or counterparties to perform their
obligations under their contracts with us (including commercial contracts, asset
sale agreements and other agreements), whether justified or not and whether due
to financial constraints (such as reduced creditworthiness, liquidity issues or
insolvency), market constraints, legal constraints (including governmental
orders or guidance), the exercise of contractual or common law rights that
allegedly excuse their performance (such as force majeure or similar claims) or
other factors;

•our inability to perform our obligations under our contracts, whether due to
non-performance by third parties, including our customers or counterparties,
market constraints, third-party constraints, supply chain issues, legal
constraints (including governmental orders or guidance), or other factors or
events;

•the incurrence of costs and expenses related to unexpected or unplanned capital expenditures, third-party claims or other factors;


•failure to implement or capitalize, or delays in implementing or capitalizing,
on investment capital projects, whether due to permitting delays, permitting
withdrawals or other factors;

•the amplification of other risks caused by volatile financial markets, capital constraints, liquidity concerns and inflation;

•the use or availability of third-party assets upon which our operations depend and over which we have little or no control;

•the currency exchange rate of the Canadian dollar to the United States dollar;


•inability to recognize current revenue attributable to deficiency payments
received from customers who fail to ship or move more than minimum contracted
volumes until the related credits expire or are used;

•significant under-utilization of our assets and facilities;

•increased costs, or lack of availability, of insurance;

•fluctuations in the debt and equity markets, including the price of PAA's units at the time of vesting under its long-term incentive plans;

•risks related to the development and operation of our assets; and

•other factors and uncertainties inherent in the transportation, storage, terminalling and marketing of crude oil, as well as in the processing, transportation, fractionation, storage and marketing of NGL.


Other factors described herein, as well as factors that are unknown or
unpredictable, could also have a material adverse effect on future results.
Please read "Risk Factors" discussed in Item 1A of our 2021 Annual Report on
Form 10-K. Except as required by applicable securities laws, we do not intend to
update these forward-looking statements and information.

                                       53

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