Plains All American Pipeline(PAA) - 2024 Q4 - Annual Results

Financial Performance - Fourth-quarter 2024 net income attributable to Plains All American was $36 million, a decrease of 88% compared to $312 million in Q4 2023[4] - Full-year 2024 net income attributable to Plains All American was $772 million, down 37% from $1.23 billion in 2023[4] - Fourth-quarter 2024 adjusted EBITDA attributable to Plains All American was $729 million, exceeding guidance, while full-year adjusted EBITDA was $2.78 billion, a 3% increase from $2.71 billion in 2023[4] - Full-year 2024 adjusted free cash flow was $1.17 billion, a decrease of 31% from $1.8 billion in 2023[5] - Revenues for Q4 2024 were $12,402 million, a decrease of 2.3% from $12,698 million in Q4 2023; total revenues for the year increased by 2.8% to $50,073 million from $48,712 million[23] - Operating income for Q4 2024 was $87 million, down 79.6% from $426 million in Q4 2023; total operating income for the year decreased by 22.0% to $1,178 million from $1,510 million[23] - Net income attributable to Plains All American Pipeline (PAA) for Q4 2024 was $36 million, a significant drop from $312 million in Q4 2023; total net income for the year decreased to $772 million from $1,230 million[28] - Adjusted net income attributable to Plains All American (PAA) for Q4 2024 was $357 million, slightly up from $355 million in Q4 2023, indicating a year-over-year growth of 0.6%[33] - Net income for Q4 2024 was $119 million, down from $399 million in Q4 2023, reflecting a decrease of 70.2%[36] - Total net income attributable to PAA for the twelve months ended December 31, 2024, was $1.113 billion, down from $1.502 billion in 2023, a decrease of 26%[36] Cash Flow and Liquidity - Adjusted Free Cash Flow after Distributions for the year was impacted by cash distributions paid to preferred and common unitholders, reflecting the company's liquidity management strategy[21] - Cash and cash equivalents at the end of the period were $348 million, down from $450 million at the end of 2023, indicating a decrease in liquidity[30] - The company reported a net cash provided by operating activities of $2,490 million for the year, down from $2,727 million in 2023, highlighting a decline in operational cash flow[30] - The company incurred $1,504 million in net cash used in investing activities for the year, significantly higher than $702 million in 2023, indicating increased capital expenditures[30] - Adjusted Free Cash Flow for Q4 2024 was $365 million, a decrease from $710 million in Q4 2023, and for the twelve months ended December 31, 2024, it was $1,247 million compared to $1,798 million in 2023[40] - The company reported a significant charge of $225 million related to the write-off of a receivable for Line 901 insurance proceeds, impacting Adjusted Free Cash Flow[42] Acquisitions and Investments - The company closed three bolt-on acquisitions for approximately $670 million, including Ironwood Midstream Energy[4] - Total investment capital expenditures for Q4 2024 were $96 million, compared to $89 million in Q4 2023, representing an increase of 7.9%[31] Distribution and Shareholder Returns - The distribution per common unit was increased by 20% to $1.52 annually, with a new distribution of $0.25 per unit payable on February 14, 2025[4] - Cash distribution paid per common unit increased to $0.3175 in Q4 2024 from $0.2675 in Q4 2023, representing an increase of 18.7%[36] - The common unit distribution coverage ratio for Q4 2024 was 2.01x, compared to 2.55x in Q4 2023, indicating a decrease in coverage[36] - Total cash distributions for the twelve months ended December 31, 2024, were $1,145 million, an increase from $989 million in 2023[40] Segment Performance - Fourth-quarter 2024 crude oil segment adjusted EBITDA increased by 1% to $569 million, while NGL segment adjusted EBITDA decreased by 9% to $154 million[8] - Revenues from crude oil segment for Q4 2024 were $11,959 million, while NGL segment revenues were $535 million, compared to $12,187 million and $623 million respectively in Q4 2023[44] - Segment Adjusted EBITDA for crude oil was $569 million in Q4 2024, slightly up from $563 million in Q4 2023, while NGL segment Adjusted EBITDA decreased to $154 million from $169 million[44] - Crude Oil segment revenues for the twelve months ended December 31, 2024, increased to $48,720 million from $47,174 million in 2023, representing a growth of 3.3%[16] - NGL segment revenues decreased to $1,724 million in 2024 from $1,935 million in 2023, a decline of 10.9%[16] - Segment Adjusted EBITDA for the Crude Oil segment was $2,276 million in 2024, up from $2,163 million in 2023, reflecting a 5.2% increase[16] - NGL segment Adjusted EBITDA decreased to $480 million in 2024 from $522 million in 2023, a decrease of 8.1%[50] Balance Sheet and Financial Position - Total assets decreased to $26,562 million in 2024 from $27,355 million in 2023, primarily due to reductions in property and equipment and intangible assets[24] - Total liabilities decreased slightly to $13,466 million in 2024 from $13,623 million in 2023, indicating a stable leverage position[24] - Long-term debt-to-total book capitalization ratio increased to 42% in 2024 from 41% in 2023, reflecting a slight increase in leverage[25] - Total revenues for the twelve months ended December 31, 2024, increased to $50,073 million, up from $48,712 million in 2023, representing a growth of 2.8%[53] - Operating income decreased to $1,172 million for the twelve months ended December 31, 2024, compared to $1,501 million in 2023, a decline of 21.9%[53] - Basic and diluted net income per Class A share for the twelve months ended December 31, 2024, was $0.52, compared to $1.01 in 2023, reflecting a decline of 48.5%[56] - Total assets as of December 31, 2024, were $27,756 million, a slight decrease from $28,597 million as of December 31, 2023[55] - Current liabilities decreased to $4,924 million as of December 31, 2024, from $5,005 million in 2023, a reduction of 1.6%[55] Strategic Outlook and Risks - The company expects full-year 2025 adjusted EBITDA attributable to Plains All American to be between $2.80 billion and $2.95 billion[4] - Anticipated adjusted free cash flow for 2025 is approximately $1.15 billion, reduced by $580 million for previously announced bolt-on transactions[4] - The leverage ratio is expected to be at or below the low-end of the target range of 3.25x to 3.75x, providing significant balance sheet flexibility[4] - The company anticipates potential risks including fluctuations in crude oil demand and prices, which could impact midstream services and commercial opportunities[57] - The company is focused on strategic opportunities including acquisitions and joint ventures to enhance operational performance and market position[57] - PAA is impacted by various risks including weather interference, regulatory changes, and production level fluctuations in the Permian Basin[59] - The company faces challenges related to customer performance under contracts, which may affect revenue recognition[59] - PAA's operations are influenced by capital market conditions that could increase the cost of capital or limit financing options[59] - The effectiveness of risk management activities is crucial for PAA's operational stability[59] - The company is exposed to fluctuations in debt and equity markets, which may affect long-term incentive plans[59] - PAA's ability to attract and retain key personnel is essential for maintaining operational efficiency[59] Company Overview - The company is headquartered in Houston, Texas, and is publicly traded as a master limited partnership[61] - Plains All American Pipeline (PAA) and Plains GP Holdings (PAGP) are significant players in the North American energy infrastructure and logistics sector[61] - PAA handles over 8 million barrels per day of crude oil and natural gas liquids (NGL) on average[60] - The company operates an extensive network of pipeline gathering and transportation systems, along with terminalling, storage, processing, and fractionation assets[60]