01—Abstract
Summary
Summary of the 8-K filed August 2, 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 second-quarter 2024 results on August 2, 2024 and raised full-year 2024 Adjusted EBITDA guidance. Net income attributable to PAA was $250 milliona for the quarter, down from $293 million a year earlier, and net cash provided by operating activities was $653 million. Adjusted EBITDA attributable to PAA rose to $674 million from $597 million.
The company raised the midpoint of its full-year 2024 Adjusted EBITDA attributable to PAA guidance by $75 millionb, to a range of $2.725 to $2.775 billion, and reiterated full-year Adjusted Free Cash Flow guidance of $1.55 billion. Segment results were mixed. Crude Oil Segment Adjusted EBITDA rose to $576 million from $529 million, driven mainly by higher tariff volumes, tariff escalations and acquisitions, partly offset by fewer market-based opportunities.
NGL Segment Adjusted EBITDA increased to $94 millionc from $62 million, reflecting the absence of prior-year turnaround impacts and iso-to-normal butane spread benefits. Adjusted Free Cash Flow fell to $411 million from $650 million, though management attributed much of the decline to working capital changes, and Adjusted Free Cash Flow excluding changes in assets and liabilities was $421 million compared with $519 million. The company also priced a $650 million offering of unsecured senior notes at 5.7% due 2034.
Total debt-to-total book capitalization including short-term debt was 44%d at June 30, 2024, compared with 43% at December 31, 2023. The filing furnishes the results press release as Exhibit 99.1 under Items 2.02 and 7.01.
02—Key points
Key Highlights
- Adjusted EBITDA attributable to PAA of $674 million, up from $597 million in the second quarter of 2023
- Full-year 2024 Adjusted EBITDA attributable to PAA guidance midpoint raised by $75 million to a range of $2.725 to $2.775 billion
- Full-year 2024 Adjusted Free Cash Flow guidance of $1.55 billion reiterated
- Crude Oil Segment Adjusted EBITDA of $576 million, up 9%, and NGL Segment Adjusted EBITDA of $94 million, up 52%
- Net income attributable to PAA of $250 million, down 15% from $293 million a year earlier; diluted net income per common unit of $0.26 versus $0.32
- Adjusted Free Cash Flow of $411 million versus $650 million, with the decline partly tied to changes in assets and liabilities
- Priced $650 million of unsecured senior notes at 5.7% due 2034; total debt-to-total book capitalization including short-term debt of 44%
03—Questions
Frequently Asked Questions
Did Plains raise its 2024 earnings outlook?
Plains raised the midpoint of its full-year 2024 Adjusted EBITDA attributable to PAA guidance by $75 million, to a range of $2.725 to $2.775 billion. Its Adjusted Free Cash Flow guidance of $1.55 billion was reiterated, not raised.
Why did net income and cash flow decline year over year?
Net income attributable to PAA fell to $250 million from $293 million, and net cash provided by operating activities fell to $653 million from $888 million. The filing does not give a single cause for the operating cash flow decline. Adjusted Free Cash Flow excluding changes in assets and liabilities was $421 million, compared with $519 million a year earlier.
What drove the growth in segment profits?
Crude Oil Segment Adjusted EBITDA increased mainly on higher tariff volumes, tariff escalations and acquisition contributions, partly offset by fewer market-based opportunities. NGL Segment Adjusted EBITDA increased because the prior year included turnaround impacts on sales volumes, and because of iso-to-normal butane spread benefits in the second quarter of 2024.
What financing activity did the company announce?
The company priced a public offering of $650 million of unsecured senior notes at 5.7% due 2034. Total debt-to-total book capitalization including short-term debt was 44% at June 30, 2024, up from 43% at December 31, 2023.
04—Continue