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Plains All American Pipeline 8-K Report, Financial Results (Feb 9, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed February 9, 2024
Period End
February 9, 2024
Securities
PAAPAAPU
In the record · 2016–202610-K1110-Q328-K168

PAA filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 168 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’17Oct ’17
  2. Leadership change8-K · Sep ’20Sep ’20
  3. Material agreement8-K · Aug ’22Aug ’22
  4. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed February 9, 2024. Cited figures are marked; the original filing is the authoritative source.

Plains All American Pipeline, L.P.

(Nasdaq: PAA) reported fourth-quarter and full-year 2023 results on February 9, 2024, alongside 2024 guidance, as furnished in Exhibit 99.1. Net income attributable to PAA was $312 milliona for the fourth quarter and $1.23 billion for the full year, compared with $263 million and $1.04 billion in the prior-year periods. Net cash provided by operating activities was $1.01 billion for the quarter and $2.73 billion for the year.

Adjusted EBITDA attributable to PAA was $737 millionb for the quarter and $2.71 billion for the year, which the company describes as above the top end of its guidance. Full-year Adjusted Free Cash Flow (excluding changes in assets and liabilities) was $1.60 billion, and year-end leverage was 3.1x. For 2024, the company expects Adjusted EBITDA attributable to PAA of $2.625 billion to $2.725 billion and approximately $1.65 billion of Adjusted Free Cash Flow (excluding changes in assets and liabilities).

It expects about $500 millionc of Adjusted Free Cash Flow after Distributions (excluding changes in assets and liabilities). The board approved raising the annualized common distribution by $0.20 to $1.27 per unit beginning in February 2024, a 19% aggregate increase versus 2023 levels. The company reaffirmed its leverage ratio target range of 3.25x to 3.75x and anticipates full-year 2024 Investment and Maintenance Capital of approximately $375 million and $230 million, net to PAA, respectively.

Management cited two asset sales, three bolt-on acquisitions, and two credit rating upgrades during 2023, and said these moves support its target of achieving BBB credit ratings. The filing also notes that the fourth-quarter 2022 results included a $230 milliond Line 901 class action settlement payment, which affects year-over-year comparisons of Adjusted Free Cash Flow.

02—Key points

Key Highlights

  1. Q4 2023 net income attributable to PAA was $312 million, up from $263 million in Q4 2022; full-year 2023 net income was $1.23 billion versus $1.04 billion in 2022.
  2. Q4 2023 Adjusted EBITDA attributable to PAA was $737 million and full-year 2023 was $2.71 billion, both above the top end of company guidance.
  3. Full-year 2023 Adjusted Free Cash Flow (excluding changes in assets and liabilities) was $1.60 billion, and year-end leverage was 3.1x.
  4. 2024 guidance calls for Adjusted EBITDA attributable to PAA of $2.625 billion to $2.725 billion and about $1.65 billion of Adjusted Free Cash Flow (excluding changes in assets and liabilities).
  5. The board approved a $0.20 increase in the annualized common distribution to $1.27 per unit starting February 2024, a 19% aggregate increase versus 2023 levels.
  6. The company reaffirmed its leverage ratio target range of 3.25x to 3.75x and expects full-year 2024 Investment and Maintenance Capital of about $375 million and $230 million, net to PAA.
  7. During 2023, the company completed two asset sales and three bolt-on acquisitions and received two credit rating agency upgrades.

03—Questions

Frequently Asked Questions

  1. How did Plains perform in the fourth quarter and full year of 2023?

    Net income attributable to PAA was $312 million in Q4 2023 and $1.23 billion for the full year. Adjusted EBITDA attributable to PAA was $737 million for the quarter and $2.71 billion for the year, which the company says were above the top end of its guidance.

  2. What is the 2024 outlook for Plains?

    The company expects 2024 Adjusted EBITDA attributable to PAA of $2.625 billion to $2.725 billion and about $1.65 billion of Adjusted Free Cash Flow (excluding changes in assets and liabilities). It also expects about $500 million of Adjusted Free Cash Flow after Distributions (excluding changes in assets and liabilities).

  3. How are distributions to unitholders changing?

    The board approved increasing the annualized common distribution by $0.20 to $1.27 per unit, starting in February 2024. The filing describes this as a 19% aggregate increase versus 2023 levels.

  4. What is the company's leverage target and where does it stand?

    Plains reaffirmed a leverage ratio target range of 3.25x to 3.75x. Year-end 2023 leverage was 3.1x, and the company cites its goal of achieving BBB credit ratings, following two credit rating upgrades in 2023.

  5. What capital spending does Plains expect in 2024?

    The company anticipates full-year 2024 Investment Capital of approximately $375 million and Maintenance Capital of approximately $230 million, both net to PAA, and says it remains focused on disciplined capital investment.

04—Continue

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