Why did GAAP net income fall so sharply in the first quarter of 2026?

The filing shows net income attributable to PAA of $152 million versus $443 million, with a $(103) million loss from discontinued operations compared with $136 million of income a year earlier. Current income tax expense from continuing operations was $216 million, largely tied to planning and restructuring activities for the pending Canadian NGL divestiture. Selected items impacting comparability also reduced GAAP results, including $(289) million of derivative activities and inventory valuation adjustments in Adjusted EBITDA.

What is the Canadian NGL divestiture and when is it expected to close?

On June 17, 2025, the company agreed to sell substantially all of its Canadian NGL business to Keyera Corp. The transaction is expected to close in May 2026. The retained NGL assets are located in the United States. The Canadian NGL business is classified as held for sale and reported as discontinued operations.

What drove the change in Adjusted EBITDA by segment?

Adjusted EBITDA from Crude Oil increased 4% to $582 million, reflecting contributions from recent bolt-on acquisitions including Cactus III and higher pipeline volumes, partly offset by Permian long-haul pipeline contract rate resets. Adjusted EBITDA from NGL decreased 23% to $145 million, primarily due to lower weighted average frac spreads and reduced sales volumes from warmer weather.

Why did management raise 2026 guidance?

The filing attributes the $130 million increase in the Adjusted EBITDA midpoint to a strong oil macro environment and NGL contribution into May 2026, since the company extended ownership of the Canadian NGL business into May. Management also cited the timing of its view of a more constructive crude oil market, which was accelerated by global events.

How is the balance sheet positioned after the quarter?

Total debt was $11.378 billion at March 31, 2026, versus $11.262 billion at December 31, 2025, and total debt-to-total book capitalization including short-term debt was 54%. Cash and cash equivalents were $171 million, down from $328 million. Management expects leverage to move toward the midpoint of its 3.25x to 3.75x target range after the NGL sale closes.

PAA/PAAPU 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed May 8, 2026. 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 2026 results on May 8, 2026 and raised full-year 2026 Adjusted EBITDA guidance. First-quarter Net income attributable to PAA was $152 million^a, down from $443 million, and Adjusted EBITDA attributable to PAA was $730 million, compared with $754 million a year earlier. Net cash provided by operating activities was $418 million versus $639 million.

Results include both continuing and discontinued operations, since the Canadian NGL business sold to Keyera Corp. is classified as held for sale and discontinued operations. The company reported a pro forma leverage ratio of 4.1x at quarter-end and expects to move toward the midpoint of its 3.25x to 3.75x target range after the NGL divestiture closes. Management raised the midpoint of 2026 Adjusted EBITDA attributable to PAA guidance by $130 million to $2.880 billion^b, plus or minus $75 million, citing a strong oil macro environment and NGL contribution into May 2026.

Full-year Adjusted Free Cash Flow guidance was increased to approximately $1.850 billion^c, excluding changes in assets and liabilities and anticipated NGL divestiture proceeds. Maintenance capital guidance increased to $185 million, while growth capital remains at $350 million. First-quarter Adjusted EBITDA from Crude Oil rose 4% to $582 million, while Adjusted EBITDA from NGL fell 23% to $145 million, due to lower frac spreads and reduced sales volumes from warmer weather.

The quarterly distribution was $0.4175^d per unit. The filing states the company expects the NGL divestiture to close in May 2026 and describes the transition to a pure-play crude oil midstream provider.

02—Key points

Key Highlights

Net income attributable to PAA was $152 million versus $443 million in the prior-year quarter; diluted net income per common unit was $0.14 versus $0.49.
Adjusted EBITDA attributable to PAA was $730 million versus $754 million; Adjusted Free Cash Flow was $82 million versus $(308) million.
Full-year 2026 Adjusted EBITDA attributable to PAA guidance midpoint raised by $130 million to $2.880 billion, +/- $75 million.
Full-year 2026 Adjusted Free Cash Flow guidance increased to approximately $1.850 billion, excluding changes in assets and liabilities and NGL divestiture proceeds.
Maintenance capital guidance increased to $185 million; growth capital remains $350 million.
Pro forma leverage ratio was 4.1x at quarter-end, with a stated plan to move toward the midpoint of the 3.25x to 3.75x target range after the Canadian NGL divestiture closes.
Quarterly distribution of $0.4175 per unit ($1.67 annualized), described as a current distribution yield of ~7.5%.

03—Questions

Frequently Asked Questions

Why did GAAP net income fall so sharply in the first quarter of 2026?
The filing shows net income attributable to PAA of $152 million versus $443 million, with a $(103) million loss from discontinued operations compared with $136 million of income a year earlier. Current income tax expense from continuing operations was $216 million, largely tied to planning and restructuring activities for the pending Canadian NGL divestiture. Selected items impacting comparability also reduced GAAP results, including $(289) million of derivative activities and inventory valuation adjustments in Adjusted EBITDA.
What is the Canadian NGL divestiture and when is it expected to close?
On June 17, 2025, the company agreed to sell substantially all of its Canadian NGL business to Keyera Corp. The transaction is expected to close in May 2026. The retained NGL assets are located in the United States. The Canadian NGL business is classified as held for sale and reported as discontinued operations.
What drove the change in Adjusted EBITDA by segment?
Adjusted EBITDA from Crude Oil increased 4% to $582 million, reflecting contributions from recent bolt-on acquisitions including Cactus III and higher pipeline volumes, partly offset by Permian long-haul pipeline contract rate resets. Adjusted EBITDA from NGL decreased 23% to $145 million, primarily due to lower weighted average frac spreads and reduced sales volumes from warmer weather.
Why did management raise 2026 guidance?
The filing attributes the $130 million increase in the Adjusted EBITDA midpoint to a strong oil macro environment and NGL contribution into May 2026, since the company extended ownership of the Canadian NGL business into May. Management also cited the timing of its view of a more constructive crude oil market, which was accelerated by global events.
How is the balance sheet positioned after the quarter?
Total debt was $11.378 billion at March 31, 2026, versus $11.262 billion at December 31, 2025, and total debt-to-total book capitalization including short-term debt was 54%. Cash and cash equivalents were $171 million, down from $328 million. Management expects leverage to move toward the midpoint of its 3.25x to 3.75x target range after the NGL sale closes.

04—Continue

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