Plains Gp Holdings, L.p. · NASDAQ:PAGP
Plains Gp Holdings, L.p — Q3 2024 Earnings Presentation
34 slides from Plains Gp Holdings, L.p's earnings presentation, Nov 8, 2024
Slide 1: Investor Presentation Third-Quarter 2024
Investor Presentation Third-Quarter 2024
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures Disclosure
Forward-Looking Statements & Non-GAAP Financial Measures Disclosure This presentation contains forward-looking statements, including, in particular, statements Investor Contacts about the performance, plans, strategies and objectives for future operations of Plains All American Pipeline, L.P. (“PA
Slide 3: Financial & Operating Profile
Financial & Operating Profile Large, integrated asset footprint; investment grade; attractive yield Financial Profile ~$22B ~7.5% >10% Enterprise Distribution Adj. FCF(1) Value Yield Yield Investment Grade Credit Rating Operating Profile >8 MMb/d >6 MMb/d >1 MMb/d Total Pipeline Permian Pipeline Cru
Slide 4: Critical Crude & NGL Infrastructure
Critical Crude & NGL Infrastructure Full-service supply aggregation, quality segregation, flow assurance, access to multiple markets Crude Oil Activities 2024(G) Adj. EBITDA: $2.725B - $2.775B Raised the mid-point of 2024 guidance by $75MM +/- 20% NGL NGL Activities +/- 80% Crude Oil +/- 85% Crude O
Slide 5: Plains' Structure & Tax Attributes
Plains’ Structure & Tax Attributes Dual securities provide flexibility & optionality Summary Ownership Structure(1) GOVERNANCE OVERVIEW PAA GP HOLDINGS LLC (PAGP GP) Unified Board Directors 73% of (Unified Board of Directors) responsible subject to Directors are for PAGP & PAA Public Election(3) ind
Slide 6: PAA's MLP Structure Provides Unique Tax Benefits
PAA’s MLP Structure Provides Unique Tax Benefits Structure offers tax and estate planning benefits Pass Through Foreign Tax Tax Deferred Estate Planning Tax Structure Credit Benefits Return of Capital Advantages • Avoids double taxation (PAA pays • PAA’s Canadian subsidiary pays • Distributions gene
Slide 7: Plains' Investment Opportunity
Plains’ Investment Opportunity Generating multi-year Free Cash Flow & increasing return of capital to equity holders Attractive Distribution Yield of ~7.5% (1) Meaningful coverage, targeting multi-year distribution growth Significant Adj. Free Cash Flow (2) 2024(G): +/- $1.55B Adj. FCF / $390MM Adj.
Slide 8: Leading Distribution Yield Across Sectors
Leading Distribution Yield Across Sectors Targeting multi-year, sustainable distribution growth (1) Distribution / Dividend Yield Distribution Growth 7.5% Estimates (2) Distribution Wells Fargo Research Yield (3) ~7.5% +10.4% 3.3% 3.3% 3.0% 2.7% +5.1% 1.9% 1.6% 1.5% 1.5% 1.3% 0.9% 0.8% 0.7% Energy R
Slide 9: Macro Fundamentals & Asset Overview
Macro Fundamentals & Asset Overview NASDAQ: PAA & PAGP 9
Slide 10: World Needs "All of the Above" Sources of Energy
>10 Billion World Needs “All of the Above” Sources of Energy In 2100 Traditional energy sources account for >80% of primary global energy consumption 9.7 Billion In 2050 180,000 7.9 Billion Other In 2022 160,000 Nuclear Historical Energy Transition Considerations Hydro 140,000 - Most shifts lasted o
Slide 11: Balancing Act Continues
Balancing Act Continues OPEC+ cuts leading to observable draws in OECD Inventories OPEC+ Production Cuts Balancing Global Markets(1) Global Crude Oil Inventories at Multi-Year Lows(2) Spare capacity has increased but who holds spare capacity may be more important Despite significant US Strategic Pet
Slide 12: Global E&P Capex Underinvestment
Global E&P Capex Underinvestment Operators have opted for value over volume ($ Billions invested) $900 $800 E&P investment ~30% below $700 2010 – 2014 Average $600 $500 $400 $300 $200 $100 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: IEA 12
Slide 13: World Needs North American Energy Supply
World Needs North American Energy Supply The Permian Basin is the liquids growth engine 20.9 Permian Basin Sanctioned Other U.S. Country 11.1 10.8 8.9 Other US Shale Sanctioned 6.1 Country 4.8 4.5 4.4 Permian 3.9 3.8 2.8 U.S. Russia Saudi Arabia Permian Canada Iran China Iraq Brazil U.A.E. Kuwait No
Slide 14: Permian Basin Growth Continues
Permian Basin Growth Continues Current activity, demonstrated performance & constructive commodity prices driving growth 2024 Forecast Assumptions Permian Basin Production Outlook (1) MMb/d Production Growth 200 - 300 (2) Permian Basin (‘23 Exit to ’24 Exit) Mb/d 6.4 Assumed Activity ~290 6.1 (Annua
Slide 15: Premier Permian Crude Oil Infrastructure Position
Premier Permian Crude Oil Infrastructure Position Operating leverage allows capture of growing production & enhances pull through on broader system Cushing STRATEGICALLY LOCATED CRITICAL CRUDE OIL GATHERING & TAKEAWAY INFRASTRUCTURE FROM THE PERMIAN BASIN Wichita Falls C. City FULLY INTEGRATED Midla
Slide 16: Capturing Permian Growth
Capturing Permian Growth Highly integrated system with operating leverage to capture Permian volumes Gathering Intra-Basin Long-Haul 2,643 2,870 2,346 2,084 2,210 2,285 1,503 1,560 1,208 2022 2023 2024(G) 2022 2023 2024(G) 2022 2023 2024(G) Acreage dedications driving growth Supporting downstream mo
Slide 17: Crude Oil Segment Detail
Crude Oil Segment Detail Capturing growth via operating leverage & bolt-on acquisitions Regional Breakdown Tariff Volumes (Mb/d) 2022FY 2023FY 2024(G) Includes +/-$200MM from Merchant Terminals Canada / Gathering 2,346 2,643 2,870 Rocky Mountain / Western Intra-Basin 2,084 2,210 2,285 15% Long-Haul
Slide 18: NGL Business & Value Chain Overview
NGL Business & Value Chain Overview Highly integrated & strategically positioned assets Field Supply Fractionation Storage Consumer Chemical Plants Straddle Transport Transport Diluent for International Heavy Crude Export Straddle Transport Fractionation Storage Market Access ~6 Bcf/d Capacity ~25 M
Slide 19: Strategically Located Fractionation & Straddle Capacity
Strategically Located Fractionation & Straddle Capacity Growth in Canadian gas production benefits Plains’ Empress & Fort Sask facilities WCSB Gas Forecast (1) Increasing gas production & east gate border (Bcf/d) flows drives increasing utilization of PAA’s Empress & Ft. Sask facilities 20.4 17.3
Slide 20: NGL Segment Detail
NGL Segment Detail C3+ Frac Spread substantially hedged for 2024 Majority of EBITDA generated by C3+ frac spread Unhedged C3+ benefit Fractionation & Marketing 5% – Purchase AECO natural gas & sell spec products (C3+) on Fee for 40% Service Mont Belvieu pricing(1) 2024(G): +/- $465MM(4) – +/- 56 M
Slide 21: NGL Segment Frac Spread & Hedging Profile
NGL Segment Frac Spread & Hedging Profile C3+ Spec Product Sales(1) (Mb/d) Hedging Profile: 2022 – 2024(G) 60 55 +/- 56 (table data reflects full-year averages) 2022 2023 2024(G) 52 50 NGL Segment Unhedged Volumes C3+ Spec Product Sales(1) (Mb/d) 55 52 +/- 56 40 % of C3+ Sales Hedged(2) 81% 87% +/-
Slide 22: Financial Overview
Financial Overview NASDAQ: PAA & PAGP 22
Slide 23: Raising Full-Year 2024 Guidance
Raising Full-Year 2024 Guidance Strong year-to-date performance & continued free cash flow generation Adj. EBITDA attributable to PAA Adj. Free Cash Flow excluding changes in Assets & Liabilities; includes $130MM of bolt-on acquisitions $2.725 - $2.775B ~$1.55B >10% Yield(1) Long-term Leverage Ratio
Slide 24: Free Cash Flow Priorities
Free Cash Flow Priorities Committed to capital discipline, significant return of capital & financial flexibility 2024(G) Capital Allocation +/- $1.55B of Adj. Free Cash Flow (excluding changes in Assets & Liabilities) +/- $130 Bolt-on Acquisitions Targeting multi-year, sustainable distribution growt
Slide 25: Plains' Bolt-On Strategy
Plains’ Bolt-On Strategy Well positioned to capture incremental opportunities (1) (2) CUMULATIVE NET INVESTMENT RETURN THRESHOLD BOLT-ON ACQUISITIONS ~$535 MM 15% + 8 BOLT-ON FRAMEWORK 2022 / 2023 / 2024 Advantage JV Pipeline* DISCIPLINED RETURN threshold – 300 to 500 Bps above WACC Cactus II OMOG J
Slide 26: Disciplined Capital Investments
Disciplined Capital Investments Capital-efficient expansion & debottlenecking opportunities ($ millions) $2,500 Capital Overview Investment Capital Maintaining capital discipline through rigorous vetting (Net to PAA) Maintenance Capital $2,000 (Net to PAA) Hurdle rate well in excess of WACC Se
Slide 27: Long-Term Leverage Ratio Target Range
Long-Term Leverage Ratio Target Range Maintaining flexibility for returns to equity holders & disciplined investment opportunities Balance sheet leverage vs. leverage ratio target range Includes 50% debt treatment for preferred equity Leverage Ratio Reduced leverage target range by 0.5x Target Range
Slide 28: Senior Note Maturity Profile – Investment Grade Credit Rating
Senior Note Maturity Profile – Investment Grade Credit Rating Recently upgraded to BBB at Fitch / S&P and positive outlook at Moody’s Senior Note Debt (face value): ~$7.9 Billion Weighted Average Tenor: ~9.2 years Percentage Fixed: ~100% Weighted Average Rate on Senior Notes: ~4.7% November Maturity
Slide 29: Delivering on Increasing Returns of Capital to Equity Holders
Delivering on Increasing Returns of Capital to Equity Holders Targeting multi-year, sustainable distribution growth ($/Unit; Common Distribution Coverage) 2024: +$0.20/unit annualized (+19%) vs. 2023 $1.27 (~190%) $1.07 (~220%) Future Considerations $0.87 (~265%) Subject to board approval, financi
Slide 30: Meaningful Progress on Long-Term Goals & Initiatives
Meaningful Progress on Long-Term Goals & Initiatives Plains is well positioned today & going forward Pre-2020 T O D AY (1) Midstream 1.0 Midstream 3.0 Average HSE Performance Improvement in Key HSE Metrics Multi-year build out in process Significant Operating Leverage Significant Investment Capital
Slide 31: Key Takeaways from our Presentation
Key Takeaways from our Presentation Positioned Well for the Future North American Hydrocarbons Key to Meeting Global Demand 1 Permian Basin driving U.S. supply growth 2 Capturing Volume Growth via Operating Leverage Growth in Permian tariff volumes 3 Generating Significant Adj. Free Cash ` Flow(1) 2
Slide 32: Appendix
Appendix - ree — sane IPLAINS ry Se,
Slide 33: 2024(G): Financial & Operational Metrics & Assumptions
2024(G): Financial & Operational Metrics & Assumptions (1) Financial ($MM, except per-unit metrics) 2024(G) Adjusted EBITDA attributable to PAA $2,725 - $2,775 Crude Oil Segment 2,270 NGL Segment 465 Other 15 Distributable Cash Flow available to Common Unitholders $1,700 Common Unit Distribution Cov
Slide 34: Investor Presentation Third-Quarter 2024
Investor Presentation Third-Quarter 2024