01—Abstract
Summary
Summary of the 8-K filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Plains All American Pipeline, L.P.
(Nasdaq: PAA) and Plains GP Holdings (Nasdaq: PAGP) reported first-quarter 2024 results on May 3, 2024, and reaffirmed full-year 2024 Adjusted EBITDA guidance of $2.625a - $2.725 billion. Net income attributable to PAA was $266 million, down from $422 million a year earlier, and net cash provided by operating activities was $419 million versus $743 million. Adjusted EBITDA attributable to PAA was $718 million, roughly flat with $715 million in the prior-year quarter, and Adjusted Free Cash Flow (excluding changes in assets and liabilities) was $262 million versus $625 million.
The company updated its Permian long-haul contracting. Contracted volumes were increased and contract terms extended so that the weighted average contract duration of the Permian long-haul portfolio is approximately 5 years, through 2028, including new contracts or extensions on Cactus I, Cactus II and Basin/Sunrise. Management expects underlying growth and efficient growth investments to offset lower contracted rates, resulting in broadly flat Adjusted EBITDA in 2026 compared with 2024 guidance for the Crude Oil segment.
Plains also acquired an additional 10% interest in Saddlehorn Pipeline Company and a Mid-Con terminal asset for aggregate cash consideration of approximately $110 millionb. The distribution per common unit declared for the quarter rose to $0.3175 from $0.2675, and the annualized common distribution was increased by $0.20 to $1.27 per unit.
02—Key points
Key Highlights
- Net income attributable to PAA of $266 million, down from $422 million in Q1 2023; diluted net income per common unit of $0.29 versus $0.52
- Adjusted EBITDA attributable to PAA of $718 million, compared with $715 million a year earlier; full-year 2024 Adjusted EBITDA guidance of $2.625 - $2.725 billion reaffirmed
- Adjusted Free Cash Flow of $70 million as reported; $262 million excluding changes in assets and liabilities, versus $625 million in the prior-year period on the same basis
- Permian long-haul weighted average contract duration extended to approximately 5 years, through 2028, including Cactus I, Cactus II and Basin/Sunrise
- Expected broadly flat Crude Oil segment Adjusted EBITDA in 2026 compared with 2024 guidance, as underlying growth offsets lower contracted rates
- Bolt-on acquisitions: additional 10% interest in Saddlehorn Pipeline Company and a Mid-Con terminal asset for approximately $110 million in cash
- Annualized common distribution raised by $0.20 to $1.27 per unit (about 19% increase, paid in February)
03—Questions
Frequently Asked Questions
Did Plains change its full-year 2024 outlook?
No. The release states that Plains reaffirmed full-year 2024 Adjusted EBITDA guidance of $2.625 - $2.725 billion and that it is on track to meet that guidance.
Why did Adjusted Free Cash Flow fall so sharply?
Adjusted Free Cash Flow was $70 million compared with $823 million a year earlier. Including changes in assets and liabilities, the release shows that net cash from operating activities was $419 million versus $743 million, and net cash used in investing activities was $261 million. Excluding changes in assets and liabilities, Adjusted Free Cash Flow was $262 million versus $625 million.
What does the Permian long-haul contracting update mean for the outlook?
Plains increased contracted volumes and extended contract terms so that the weighted average duration of its Permian long-haul portfolio is approximately 5 years, through 2028. Management expects underlying growth and efficient growth investments to offset lower contracted rates, leading to broadly flat Crude Oil segment Adjusted EBITDA in 2026 compared with 2024 guidance.
How did the segments perform in the quarter?
Crude Oil segment Adjusted EBITDA rose 7% to $553 million, driven mainly by higher tariff volumes, tariff escalations and acquisition contributions, partly offset by fewer market-based opportunities. NGL segment Adjusted EBITDA fell 17% to $159 million, primarily due to lower realized frac spreads.
What distributions did Plains declare?
The distribution per common unit declared for the quarter was $0.3175, compared with $0.2675 a year earlier. The annualized common distribution was increased by $0.20 to $1.27 per unit, paid in February.
04—Continue