Plains All American Pipeline(PAA) - 2025 Q1 - Quarterly Results

Plains All American Reports First-Quarter 2025 Results This section provides an overview of Plains All American's strong Q1 2025 financial and operational performance, highlighting key achievements, financial results, and segment-specific contributions Overview and Business Highlights Plains All American reported strong Q1 2025 results with solid operational and financial performance, driven by its integrated Crude Oil and NGL businesses. The company highlighted significant cash flow generation, a strong balance sheet with a 3.3x leverage ratio, two bolt-on acquisitions, and the completion of a key fractionation project, while maintaining financial discipline and increasing its quarterly distribution by 20% year-over-year - CEO Willie Chiang emphasized the company's solid performance, substantial cash flow, strong balance sheet, and commitment to efficient growth and returning cash to unitholders amidst market volatility[4] - Key strategic and operational achievements in the quarter include: Acquired the remaining 50% interest in Cheyenne Pipeline to enhance integration from the Guernsey market to Cushing, Oklahoma; Acquired Black Knight Midstream's Permian Basin crude oil gathering business for approximately $55 million; Placed the 30 Mb/d Fort Saskatchewan fractionation complex debottleneck project into service; Increased the 2025 C3+ spec product sales hedge profile to approximately 80% at around $0.70 per gallon[5] Q1 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Net Income attributable to PAA | $443 million | | Net Cash from Operating Activities | $639 million | | Adjusted EBITDA attributable to PAA | $754 million | | Leverage Ratio | 3.3x | | Quarterly Distribution per Unit | $0.38 ($1.52 annualized) | Summary Financial Information (unaudited) The company reported significant year-over-year growth in GAAP results, with net income attributable to PAA increasing by 67% and net cash from operating activities rising by 53%. Non-GAAP results showed a 5% increase in Adjusted EBITDA attributable to PAA. Adjusted Free Cash Flow was negative, primarily due to a $624 million cash outflow for bolt-on acquisitions Q1 2025 vs Q1 2024 Financial Results (GAAP) | GAAP Results | Q1 2025 Value | Q1 2024 Value | % Change | | :--- | :--- | :--- | :--- | | Net income attributable to PAA | $443 million | $266 million | 67% | | Diluted net income per common unit | $0.49 | $0.29 | 69% | | Net cash provided by operating activities | $639 million | $419 million | 53% | | Distribution per common unit | $0.3800 | $0.3175 | 20% | Q1 2025 vs Q1 2024 Financial Results (Non-GAAP) | Non-GAAP Results | Q1 2025 Value | Q1 2024 Value | % Change | | :--- | :--- | :--- | :--- | | Adjusted net income attributable to PAA | $375 million | $354 million | 6% | | Diluted adjusted net income per common unit | $0.39 | $0.41 | (5)% | | Adjusted EBITDA attributable to PAA | $754 million | $718 million | 5% | | Adjusted Free Cash Flow | ($308 million) | $70 million | N/A | - The Q1 2025 period includes a net cash outflow of $624 million for bolt-on acquisitions, which significantly impacted Adjusted Free Cash Flow[7] Segment Performance The NGL segment was the primary driver of growth in Q1 2025, with a 19% increase in Segment Adjusted EBITDA due to higher frac spreads and sales volumes. The Crude Oil segment's performance was stable, with favorable results from higher tariff volumes and acquisitions being largely offset by increased operating expenses and refinery downtime Segment Adjusted EBITDA (in millions) | Segment | Q1 2025 (million) | Q1 2024 (million) | % Change | | :--- | :--- | :--- | :--- | | Crude Oil | $559 | $553 | 1% | | NGL | $189 | $159 | 19% | - Crude Oil Segment Adjusted EBITDA was nearly flat, as benefits from higher tariff volumes, tariff escalations, and bolt-on acquisitions were offset by higher operating expenses and the impact of refinery downtime[9] - NGL Segment Adjusted EBITDA increased by 19% compared to the prior year, primarily due to higher weighted average frac spreads and NGL sales volumes[10] Financial Statements and Data This section presents Plains All American's consolidated financial statements, including detailed statements of operations, balance sheet data, cash flow information, and key operating metrics by segment for the first quarter of 2025 Condensed Consolidated Statements of Operations For the first quarter of 2025, PAA's revenues remained stable year-over-year at approximately $12.0 billion. However, due to lower costs, operating income increased significantly by 44% to $533 million, and net income attributable to PAA rose 67% to $443 million Condensed Consolidated Statements of Operations (in millions) | Metric | 2025 (million) | 2024 (million) | | :--- | :--- | :--- | | REVENUES | $12,011 | $11,995 | | Total costs and expenses | $11,478 | $11,625 | | OPERATING INCOME | $533 | $370 | | INCOME BEFORE TAX | $566 | $365 | | NET INCOME | $516 | $351 | | NET INCOME ATTRIBUTABLE TO PAA | $443 | $266 | | Basic and diluted net income per common unit | $0.49 | $0.29 | Condensed Consolidated Balance Sheet Data As of March 31, 2025, PAA's total assets increased to $27.1 billion from $26.6 billion at year-end 2024, primarily due to a rise in Property and equipment. Total debt also rose to $8.7 billion from $7.6 billion, leading to an increase in the total debt-to-total book capitalization ratio from 44% to 47% Condensed Consolidated Balance Sheet Data (in millions) | Metric | March 31, 2025 (million) | December 31, 2024 (million) | | :--- | :--- | :--- | | Total current assets | $4,735 | $4,802 | | Property and equipment, net | $16,062 | $15,424 | | Total assets | $27,059 | $26,562 | | Total current liabilities | $4,691 | $4,950 | | Senior notes, net | $8,131 | $7,141 | | Total liabilities | $14,199 | $13,466 | | Total partners' capital | $12,860 | $13,096 | | Total liabilities and partners' capital | $27,059 | $26,562 | Debt Capitalization Ratios | Metric (million) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $8,682 | $7,621 | | Long-term debt-to-total book capitalization | 46% | 42% | | Total debt-to-total book capitalization, including short-term debt | 47% | 44% | Condensed Consolidated Cash Flow Data Net cash provided by operating activities increased by 53% to $639 million in Q1 2025. However, net cash used in investing activities surged to $1.15 billion, largely driven by $624 million in bolt-on acquisitions. Net cash from financing activities was a positive $590 million, resulting in a net increase in cash of $79 million for the quarter Condensed Consolidated Cash Flow Data (in millions) | Metric | 2025 (million) | 2024 (million) | | :--- | :--- | :--- | | Net cash provided by operating activities | $639 | $419 | | Net cash used in investing activities | $(1,149) | $(261) | | Net cash provided by/(used in) financing activities | $590 | $(273) | | Net increase/(decrease) in cash and cash equivalents | $79 | $(119) | - The Q1 2025 investing activities include a net cash outflow of $624 million for bolt-on acquisitions[28] Capital Expenditures (Consolidated, in millions) | Metric | 2025 (million) | 2024 (million) | | :--- | :--- | :--- | | Investment capital expenditures | $161 | $104 | | Maintenance capital expenditures | $41 | $57 | | Total | $202 | $161 | Operating Data by Segment In Q1 2025, total crude oil pipeline tariff volumes increased to 9,086 MBbls/d from 8,600 MBbls/d year-over-year, driven primarily by a 7% volume growth in the Permian Basin. NGL segment volumes also saw broad increases, with NGL fractionation volumes up 23% and pipeline tariff volumes up 9% compared to the prior year Average Daily Volumes by Segment (in thousands of barrels per day) | Segment Volumes | Q1 2025 (MBbls/d) | Q1 2024 (MBbls/d) | | :--- | :--- | :--- | | Crude Oil | | | | Permian Basin | 6,869 | 6,428 | | Total crude oil pipeline tariff | 9,086 | 8,600 | | NGL | | | | NGL fractionation | 157 | 128 | | NGL pipeline tariff | 234 | 214 | | Propane and butane sales | 147 | 128 | Non-GAAP Reconciliations This section provides an overview of Plains All American's non-GAAP financial measures, including detailed reconciliations of Net Income to Adjusted EBITDA and Implied DCF, and Net Cash from Operations to Adjusted Free Cash Flow, along with selected items impacting comparability Non-GAAP Financial Measures Overview Management uses non-GAAP measures such as Adjusted EBITDA, Implied Distributable Cash Flow (DCF), and Adjusted Free Cash Flow to evaluate performance, assess cash availability for distributions, and provide investors with their analytical framework. These measures adjust for certain items, such as derivative gains/losses and transaction expenses, to better reflect core operating performance and liquidity - Management uses non-GAAP financial measures to evaluate past performance, future prospects, and assess the amount of cash available for distributions, debt repayments, and other purposes[14] - Primary non-GAAP measures include Adjusted EBITDA, Implied DCF, and Adjusted Free Cash Flow. These measures are adjusted for "selected items impacting comparability" to provide a clearer view of core operating performance[14][18] - The company does not reconcile forward-looking non-GAAP financial measures as it is impractical to do so without unreasonable effort[15] Reconciliation of Net Income to Adjusted EBITDA and Implied DCF This reconciliation shows the adjustments made to Net Income to arrive at key non-GAAP metrics. For Q1 2025, Net Income of $516 million was reconciled to an Adjusted EBITDA of $881 million. After accounting for noncontrolling interests, Adjusted EBITDA attributable to PAA was $754 million. Implied DCF was $526 million, resulting in a strong common unit distribution coverage ratio of 1.73x Q1 2025 Reconciliation Summary (in millions) | Metric | Value (million) | | :--- | :--- | | Net income | $516 | | Adjusted EBITDA | $881 | | Adjusted EBITDA attributable to PAA | $754 | | Implied DCF | $526 | | Implied DCF Available to Common Unitholders | $462 | | Common Unit Distribution Coverage Ratio | 1.73x | Reconciliation of Net Cash from Operations to Adjusted Free Cash Flow This section details the conversion from GAAP's Net Cash Provided by Operating Activities to the non-GAAP measure of Adjusted Free Cash Flow. In Q1 2025, Net Cash Provided by Operating Activities of $639 million was adjusted for investing activities and other items, resulting in an Adjusted Free Cash Flow of negative $308 million. After accounting for $331 million in distributions, Adjusted Free Cash Flow after Distributions was negative $639 million, heavily impacted by acquisitions Q1 2025 Free Cash Flow Reconciliation (in millions) | Metric | Value (million) | | :--- | :--- | | Net cash provided by operating activities | $639 | | Net cash used in investing activities | $(1,149) | | Adjusted Free Cash Flow | $(308) | | Cash distributions | $(331) | | Adjusted Free Cash Flow after Distributions | $(639) | - The 2025 period includes a net cash outflow of $624 million for bolt-on acquisitions, which is a primary driver for the negative Adjusted Free Cash Flow[35] Selected Items Impacting Comparability This section details specific adjustments made to GAAP figures to arrive at non-GAAP metrics. For Q1 2025, major adjustments included a $34 million positive impact from derivative activities and inventory valuation adjustments, and a $5 million expense for transaction-related costs. The aggregate of these items resulted in a $68 million positive adjustment to derive Adjusted Net Income Attributable to PAA Selected Items Impacting Comparability (in millions) | Item | Q1 2025 (million) | Q1 2024 (million) | | :--- | :--- | :--- | | Derivative activities and inventory valuation adjustments | $34 | $(159) | | Long-term inventory costing adjustments | $3 | $33 | | Deficiencies under minimum volume commitments, net | $7 | $12 | | Transaction-related expenses | $(5) | — | | Selected items impacting comparability - Adjusted EBITDA | $30 | $(114) | | Selected items impacting comparability - Adjusted net income attributable to PAA | $68 | $(88) | - Key adjustments include gains/losses from derivative activities not in an accounting hedge relationship, changes in the cost of long-term inventory, and revenue from minimum volume commitments[37] Plains GP Holdings (PAGP) Information This section details Plains GP Holdings' (PAGP) role as the controlling entity of PAA, outlining its consolidation of PAA's financial results and reporting its net income attributable to shareholders PAGP Overview and Financials Plains GP Holdings (PAGP), which holds a non-economic controlling interest in PAA, consolidates PAA's results into its financial statements. For Q1 2025, PAGP reported net income attributable to its shareholders of $84 million, or $0.42 per Class A share. This represents a 100% increase from the $42 million, or $0.21 per share, reported in the prior-year quarter - PAGP owns an indirect non-economic controlling interest in PAA's general partner and an indirect limited partner interest in PAA, and as the control entity, it consolidates PAA's results[11] PAGP Net Income per Class A Share | Metric | 2025 (million) | 2024 (million) | | :--- | :--- | :--- | | Net income attributable to PAGP | $84 | $42 | | Basic and diluted net income per Class A share | $0.42 | $0.21 | - The consolidating financial statements for PAGP show the adjustments necessary to reflect its controlling interest in PAA, including adjustments to net income and partners' capital[44][46] Other Information This section provides important disclosures regarding forward-looking statements, outlining potential risks and uncertainties, and offers a general overview of Plains All American's business and operational scope Forward-Looking Statements The report contains forward-looking statements that are subject to numerous risks and uncertainties which could cause actual results to differ materially from expectations. Key risks cited include general economic conditions, crude oil price volatility, demand for midstream services, competition, regulatory changes, operational hazards, and the ability to consummate strategic opportunities - The report's forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated[48] - Identified risks include, but are not limited to: General economic conditions, inflation, and demand for crude oil and NGLs; Fluctuations in crude oil prices and North American production levels; Competition and capacity overbuild in operating areas; Environmental liabilities and regulatory changes; The ability to consummate acquisitions and realize benefits; Counterparty performance and credit risk[50][52] About Plains All American Plains All American (PAA) is a publicly traded master limited partnership that owns and operates a large network of midstream energy infrastructure for crude oil and natural gas liquids (NGLs) in the U.S. and Canada. On average, PAA handles over 8 million barrels per day. PAGP is the publicly traded entity that owns a controlling general partner interest in PAA - PAA is a master limited partnership with an extensive network of pipeline, terminalling, storage, and processing assets for crude oil and NGLs in key US and Canadian producing basins and market hubs[53] - PAGP is a publicly traded entity that holds an indirect, non-economic controlling general partner interest and an indirect limited partner interest in PAA[54]