HOUSTON, Aug. 02, 2024 (GLOBE NEWSWIRE) -- Plains All American Pipeline, L.P. (NASDAQ:PAA) and Plains GP Holdings (NASDAQ:PAGP) today reported strong second-quarter 2024 results and raised full-year 2024 Adjusted EBITDA guidance. Second-Quarter Results Reported net income attributable to PAA of $250 million and net cash provided by operating activities of $653 million Delivered Adjusted EBITDA attributable to PAA of $674 million Generated Adjusted Free Cash Flow of $421 million (excluding changes in Assets & Liabilities; including bolt-on acquisition capital) Successfully priced public offering of $650 million of unsecured senior notes at 5.7% due 2034 2024 Guidance Update Raising the mid-point of guidance for full-year 2024 Adjusted EBITDA attributable to PAA by $75 million to a new range of $2.725 - $2.775 billion Reiterating full-year 2024 Adjusted Free Cash Flow guidance of $1.55 billion (excluding changes in Assets & Liabilities; including bolt-on acquisition capital) "Today's announcements reflect another solid quarter with results exceeding expectations in both the Crude Oil and NGL segments. Based on our performance to-date and outlook for the remainder of the year, we are increasing our annual EBITDA guidance for 2024. This underscores the resilience of our business model and highlights the flexibility of our asset base to capture opportunities in a dynamic and evolving market," said Willie Chiang, Chairman & CEO of Plains. "We remain focused on maximizing long-term value for investors, through our consistent strategy of capital discipline, generating meaningful Free Cash Flow and increasing return of capital to equity holders while maintaining financial flexibility." Plains All American Pipeline Summary Financial Information (unaudited)(in millions, except per unit data)     Three Months EndedJune 30,   %     Six Months EndedJune 30,   % GAAP Results     2024     2023   Change       2024     2023   Change Net income attributable to PAA   $ 250   $ 293   (15)%     $ 515   $ 715   (28)% Diluted net income per common unit   $ 0.26   $ 0.32   (19)%     $ 0.55   $ 0.84   (35)% Diluted weighted average common units outstanding     701     698   — %       701     698   — % Net cash provided by operating activities   $ 653   $ 888   (26)%     $ 1,072   $ 1,631   (34)% Distribution per common unit declared for the period   $ 0.3175   $ 0.2675   19 %     $ 0.6350   $ 0.5350   19 %                                             Three Months EndedJune 30,   %     Six Months EndedJune 30,   % Non-GAAP Results (1)     2024     2023   Change       2024       2023   Change Adjusted net income attributable to PAA   $ 288   $ 243   19 %     $ 642     $ 586   10 % Diluted adjusted net income per common unit   $ 0.31   $ 0.25   24 %     $ 0.72     $ 0.66   9 % Adjusted EBITDA   $ 807   $ 700   15 %     $ 1,654     $ 1,513   9 % Adjusted EBITDA attributable to PAA (2)   $ 674   $ 597   13 %     $ 1,391     $ 1,312   6 % Implied DCF per common unit and common unit equivalent   $ 0.58   $ 0.54   7 %     $ 1.25     $ 1.16   8 % Adjusted Free Cash Flow   $ 411   $ 650   (37)%     $ 480     $ 1,474   (67)% Adjusted Free Cash Flow after Distributions   $ 125   $ 404   (69)%     $ (92 )   $ 985   ** Adjusted Free Cash Flow (Excluding Changes in Assets & Liabilities)   $ 421   $ 519   (19)%     $ 681     $ 1,145   (41)% Adjusted Free Cash Flow after Distributions (Excluding Changes in Assets & Liabilities)   $ 135   $ 273   (51)%     $ 109     $ 656   (83)%                                             ** 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 June 30, 2024 $ 576     $ 94   Three Months Ended June 30, 2023 $ 529     $ 62   Percentage change in Segment Adjusted EBITDA versus 2023 period   9 %     52 %           Segment Adjusted EBITDA   Crude Oil   NGL Six Months Ended June 30, 2024 $ 1,130     $ 253   Six Months Ended June 30, 2023 $ 1,046     $ 254   Percentage change in Segment Adjusted EBITDA versus 2023 period   8 %     — %                 Second-quarter 2024 Crude Oil Segment Adjusted EBITDA increased 9% 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. Second-quarter 2024 NGL Segment Adjusted EBITDA increased 52% versus comparable 2023 results primarily due to turnarounds impacting sales volumes in the second quarter of 2023 and incremental margins from iso-to-normal butane spread benefits in the second quarter of 2024. 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, August 2, 2024 to discuss second-quarter performance and related items. To access the internet webcast, please go to https://edge.media-server.com/mmc/p/za3n6iir/  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, gains or losses on investments in unconsolidated entities and interest income on promissory notes between and amongst PAA and related 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 EndedJune 30,   Six Months EndedJune 30,     2024       2023       2024       2023   REVENUES $ 12,933     $ 11,602     $ 24,928     $ 23,943                   COSTS AND EXPENSES               Purchases and related costs   11,858       10,544       22,775       21,867   Field operating costs   350       333       708       690   General and administrative expenses   93       85       189       171   Depreciation and amortization   257       259       511       515   (Gains)/losses on asset sales, net   1       3       1       (150 ) Total costs and expenses   12,559       11,224       24,184       23,093                   OPERATING INCOME   374       378       744       850                   OTHER INCOME/(EXPENSE)               Equity earnings in unconsolidated entities   106       89       201       178   Interest expense, net(1)   (111 )     (95 )     (205 )     (193 ) Other income, net(1)   23       20       18       85                   INCOME BEFORE TAX   392       392       758       920   Current income tax expense   (69 )     (20 )     (123 )     (81 ) Deferred income tax (expense)/benefit   7       (23 )     46       (15 )                 NET INCOME   330       349       681       824   Net income attributable to noncontrolling interests   (80 )     (56 )     (166 )     (109 ) NET INCOME ATTRIBUTABLE TO PAA $ 250     $ 293     $ 515     $ 715                   NET INCOME PER COMMON UNIT:               Net income allocated to common unitholders — Basic and Diluted $ 180     $ 227     $ 382     $ 588   Basic and diluted weighted average common units outstanding   701       698       701       698   Basic and diluted net income per common unit $ 0.26     $ 0.32     $ 0.55     $ 0.84                                         (1) "Interest expense, net" and "Other income, net" each include $15 million for the three and six months ended June 30, 2024 related to interest on promissory notes between and amongst PAA and related entities. These amounts offset and do not impact Net Income or Non-GAAP metrics such as Adjusted EBITDA, Implied DCF and Adjusted Free Cash Flow.       PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY (unaudited)           CONDENSED CONSOLIDATED BALANCE SHEET DATA(in millions)   June 30,2024   December 31,2023 ASSETS       Current assets (including Cash and cash equivalents of $553 and $450, respectively) $ 5,387   $ 4,913 Property and equipment, net   15,616     15,782 Investments in unconsolidated entities   2,862     2,820 Intangible assets, net   1,741     1,875 Linefill   980     976 Long-term operating lease right-of-use assets, net   312     313 Long-term inventory   290     265 Other long-term assets, net   265     411 Total assets $ 27,453   $ 27,355         LIABILITIES AND PARTNERS' CAPITAL       Current liabilities $ 5,406   $ 5,003 Senior notes, net   7,139     7,242 Other long-term debt, net   72     63 Long-term operating lease liabilities   279     274 Other long-term liabilities and deferred credits   979     1,041 Total liabilities   13,875     13,623         Partners' capital excluding noncontrolling interests   10,276     10,422 Noncontrolling interests   3,302     3,310 Total partners' capital   13,578     13,732 Total liabilities and partners' capital $ 27,453   $ 27,355             DEBT CAPITALIZATION RATIOS(in millions)   June 30,2024   December 31,2023 Short-term debt $ 765     $ 446   Long-term debt   7,211       7,305   Total debt $ 7,976     $ 7,751           Long-term debt $ 7,211     $ 7,305   Partners' capital excluding noncontrolling interests   10,276       10,422   Total book capitalization excluding noncontrolling interests ("Total book capitalization") $ 17,487     $ 17,727   Total book capitalization, including short-term debt $ 18,252     $ 18,173           Long-term debt-to-total book capitalization   41 %     41 % Total debt-to-total book capitalization, including short-term debt   44 %     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 EndedJune 30,   Six Months EndedJune 30,     2024       2023       2024       2023   Basic and Diluted Net Income per Common Unit               Net income attributable to PAA $ 250     $ 293     $ 515     $ 715   Distributions to Series A preferred unitholders   (44 )     (44 )     (88 )     (85 ) Distributions to Series B preferred unitholders   (19 )     (18 )     (39 )     (36 ) Amounts allocated to participating securities   (8 )     (5 )     (9 )     (8 ) Other   1       1       3       2   Net income allocated to common unitholders $ 180     $ 227     $ 382     $ 588                   Basic and diluted weighted average common units outstanding (2) (3)   701       698       701       698                   Basic and diluted net income per common unit $ 0.26     $ 0.32     $ 0.55     $ 0.84                                         (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 and six months ended June 30, 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)   Six Months EndedJune 30,     2024       2023   CASH FLOWS FROM OPERATING ACTIVITIES       Net income $ 681     $ 824   Reconciliation of net income to net cash provided by operating activities:       Depreciation and amortization   511       515   (Gains)/losses on asset sales, net   1       (150 ) Deferred income tax expense/(benefit)   (46 )     15   Equity earnings in unconsolidated entities   (201 )     (178 ) Distributions on earnings from unconsolidated entities   250       219   Other   77       57   Changes in assets and liabilities, net of acquisitions   (201 )     329   Net cash provided by operating activities   1,072       1,631           CASH FLOWS FROM INVESTING ACTIVITIES       Net cash used in investing activities   (418 )     (6 )         CASH FLOWS FROM FINANCING ACTIVITIES       Net cash used in financing activities   (545 )     (1,101 )         Effect of translation adjustment   (6 )     8           Net increase in cash and cash equivalents and restricted cash   103       532           Cash and cash equivalents and restricted cash, beginning of period   450       401   Cash and cash equivalents and restricted cash, end of period $ 553     $ 933                   CAPITAL EXPENDITURES(in millions)   Net to PAA (1)   Consolidated   Three Months EndedJune 30,   Six Months EndedJune 30,   Three Months EndedJune 30,   Six Months EndedJune 30,     2024     2023     2024     2023     2024     2023     2024     2023 Investment capital expenditures:                               Crude Oil $ 42   $ 52   $ 107   $ 102   $ 58   $ 71   $ 148   $ 143 NGL   23     31     37     39     23     31     37     39 Total Investment capital expenditures   65     83     144     141     81     102     185     182 Maintenance capital expenditures   56     58     109     103     61     62     118     109   $ 121   $ 141   $ 253   $ 244   $ 142   $ 164   $ 303   $ 291                                                       (1) Excludes expenditures attributable to noncontrolling interests.       PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIESFINANCIAL SUMMARY (unaudited)           NON-GAAP RECONCILIATIONS(in millions, except per unit and ratio data) Computation of Basic and Diluted Adjusted Net Income Per Common Unit (1) :   Three Months EndedJune 30,   Six Months EndedJune 30,     2024