Plains All American Pipeline, L.p. · NASDAQ:PAA
Plains All American Pipeline, L.p — Investor Presentation (November 2022)
42 slides from Plains All American Pipeline, L.p's investor presentation, November 2022
Slide 1: Investor Presentation Fourth-Quarter 2022
Investor Presentation Fourth-Quarter 2022
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 about the performance, plans, strategies and objectives for future operations of Plains All American Pipeline, L.P. (“PAA”) and Plains GP
Slide 3: Plains: Strong Positioning for the Future
Plains: Strong Positioning for the Future Streamlined asset base, improved financial flexibility, increasing returns of capital to equity holders Constructive, Long-Term Fundamentals Permian Operating Leverage Generating Meaningful Multi-Year FCF Leverage below mid-point of targeted range Increasing
Slide 4: Plains' Structure & Tax Attributes
Plains’ Structure & Tax Attributes Dual securities provide flexibility & optionality 1 for 1 Economic & Voting Rights Key Considerations PAA GP HOLDINGS LLC (PAGP GP) Governance (Unified Board of Directors) – 100% of Directors subject to public election (staggered 3-yr rolling basis) – 75% of Direct
Slide 5: Financial & Operating Profile
Financial & Operating Profile Large, integrated asset footprint; investment grade; attractive yield / distribution coverage Financial Profile ~$19B ~7% ~265% Enterprise Distribution Distribution Value Yield Coverage Investment Grade Credit Rating Operating Profile >7 MMb/d >5 MMb/d >1 MMb/d Total Pi
Slide 6: Critical Crude & NGL Infrastructure
Critical Crude & NGL Infrastructure Full-service supply aggregation, quality segregation, flow assurance, access to multiple markets Crude Oil Activities 2022(G) Adj. EBITDA: $2.45B +/- 20% NGL NGL Activities +/- 80% Crude Oil ( +/- 55% Permian) 2022(G): Furnished November 2, 2022. Attributable to P
Slide 7: Business Fundamentals & Asset Overview
Business Fundamentals & Asset Overview
Slide 8: Long-Term Fundamentals Remain Constructive
Long-Term Fundamentals Remain Constructive North American hydrocarbons are key to meeting global demand Prolonged Underinvestment in Global Upstream(1) Global Demand Has Outpaced Supply(2) ($ Billions invested) (MMb/d) $800 105 100 $600 95 90 $400 85 $200 80 World Production World Consumption 75 $0
Slide 9: The Permian Basin Is The North America Crude Growth Engine
The Permian Basin Is The North America Crude Growth Engine Expect Permian Basin to outgrow rest of NAM combined between YE 2022 – YE 2025 US Oil Production Outlook Through 2025 (Mb/d) Forecast 22,000 NAM growth YE’22-YE’25 = ~2.8 mmb/d 20,000 18,000 16,000 Permian Basin +1,800 mb/d 14,000 12,000 Oth
Slide 10: 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 Strategically Located Cushing – Critical crude oil gathering & takeaway infrastructure from the Permian Basin Wichita Falls Midland Fully Integrated Win
Slide 11: Permian Position: Unmatched Flexibility, Optionality, Connectivity & Downstream Market Access
Permian Position: Unmatched Flexibility, Optionality, Connectivity & Downstream Market Access Large Scale Aggregation – >4MM long-term, dedicated acres Cushing – >300 Mb/d gathering system growth (YE-21 to YE-22) – 1st purchase ~1.1 MMb/d, ~80% term contracted Colorado City Houston Unmatched Connect
Slide 12: Plains' Permian System
Plains’ Permian System: Highly Integrated with Substantial Leverage to Permian Growth Gathering Intra-Basin Long-Haul Capacity(1): ~3.7 MMB/d Capacity(1): ~3.1 MMB/d Capacity(1): ~1.7 MMB/d 2022(G) FY Tariff Volumes(2): ~2.4 MMB/d 2022(G) FY Tariff Volumes(2): ~2.1 MMB/d 2022(G) FY Tarif
Slide 13: Capturing Permian Volume Growth
Capturing Permian Volume Growth Permian building momentum, additional volumes added since Aug(G) (tariff volumes in Mb/d) 6,175 5,698 4Q22(G) vs. 4Q21: ↑880 Mb/d 5,297 5,434 1,405 5,214 1,172 Gathering: ↑ 320 Mb/d 1,094 1,146 1,090 – Tracking in-line-with expectations 2,205 Intra-Basin: ↑300 Mb/
Slide 14: 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 Co-Ed
Slide 15: Financial & Capital Allocation Overview
Financial & Capital Allocation Overview
Slide 16: 2022(G): Financial Metrics
2022(G): Financial Metrics Increasing EBITDA, generating meaningful FCF, significant distribution coverage & achieved leverage targets ($ millions, except per-unit metrics) Cash Flow Adjusted EBITDA / DCF Aug(G) (+/-) Nov(G) (+/-) Segment Adjusted EBITDA Aug(G) (+/-) Nov(G) (+/-) Cash Flow from Ops
Slide 17: 2022 Key Drivers: Feb(G) vs. Nov(G)
2022 Key Drivers: Feb(G) vs. Nov(G) Solid execution, additional volume capture & favorable commodity price environment driving higher full-year outlook (Adj. EBITDA attributable to PAA, $ millions) NGL: +$115MM Crude: +$135MM +/- $2,450 Other +/- $2,200 Increased POP JV / LH Higher frac spread
Slide 18: Long-Term Financial Strategy & Capital Allocation Framework
Long-Term Financial Strategy & Capital Allocation Framework Generating significant FCF, improving financial flexibility & increasing returns of capital to equity holders Focus Areas Capital Allocation Summary Achieved leverage target (3Q22: 3.7x, YE-22: +/- 3.8x) I Increasing Long-Term Returns of
Slide 19: Increasing Long-Term Returns of Capital to Equity Holders
I Increasing Long-Term Returns of Capital to Equity Holders Targeting multi-year, sustainable distribution growth & opportunistic repurchases ($/Unit; Common Distribution Coverage) 2023: +$0.20/unit annualized (+23%) vs. 2022 (Payable Feb-23)(2) $1.07 $0.87 (~265%(1)) Beyond 2023+ Considerations $0.
Slide 20: Disciplined Capital Investments
II Disciplined Capital Investments Pursuing & developing capital-efficient expansion & debottlenecking opportunities ($ millions) Maintain financial discipline on future investments Create long-term shareholder value by leveraging existing Net to PAA crude & NGL infrastructure – Capital-efficien
Slide 21: Long-Term Balance Sheet Stability & Financial Flexibility
III Long-Term Balance Sheet Stability & Financial Flexibility Lowers risk & creates additional flexibility for returns to equity holders & investment opportunities Leverage Ratio & Total Debt(1) Ensure balance sheet flexibility through cycles 4.8 4.5x 4.5 4.5x – Achieve & maintain mid-BBB / Baa cr
Slide 22: Current Financial Profile
Current Financial Profile Achieved leverage below mid-point of target range 12/31/21 9/30/22 Balance Sheet Cash & Equivalents $449 $623 Short-Term Debt 822 459 Long-Term Debt 8,398 7,986 Total Debt $9,220 $8,445 Adj. EBITDA (LTM)(1) $2,196 $2,415 Credit Stats & Liquidity Target Leverage Ratio 4.5x 3
Slide 23: Meaningful Progress on Long-Term Goals & Initiatives
Meaningful Progress on Long-Term Goals & Initiatives Plains has reached a positive inflection point & is well positioned Asset Base Balance Sheet Capital Allocation Completed large-scale multi-year Achieved leverage below mid- Increased distribution $0.15/unit capital program, meaningful point
Slide 24: Summary Overview
Summary Overview Constructive fundamentals, strong operating leverage, increasing returns of capital to equity holders Financial Flexibility – 2022 Adj. EBITDA(G)(1): +$250MM vs. Feb(G) – Achieved leverage objectives earlier than anticipated – Targeting multi-year, sustainable distribution growth Pe
Slide 25: Plains: Strong Positioning for the Future
Plains: Strong Positioning for the Future Streamlined asset base, improved financial flexibility, increasing returns of capital to equity holders Constructive, Long-Term Fundamentals Permian Operating Leverage Generating Meaningful Multi-Year FCF Leverage below mid-point of targeted range Increasing
Slide 26: Appendix
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Slide 27: Overview of Plains' Business
Overview of Plains’ Business Critical Crude & NGL Infrastructure Crude Oil Segment (~80% of 2022(G)) NGL Segment (~20% of 2022(G)) Assets: Pipelines, storage, terminalling & trucks Assets: Fractionation, straddle, pipelines, storage, terminalling & rail capacity Commercial Profile: long-term m
Slide 28: Crude Oil Segment 2022(G): +/- 80% of Adj. EBITDA
Crude Oil Segment 2022(G): +/- 80% of Adj. EBITDA Regional Detail 2022(G): 7,550 Mb/d Pipeline Volumes 2022(G): $1,955MM Adj. EBITDA(2) Includes +/-$200MM from Storage Terminals(3) ~15% Canada / Rockies/ Western ~11% Canada / ~15% Rockies / South Texas / ~75% Western ~55% US Gulf Coast Permian(1) Pe
Slide 29: Plains' Permian System: Highly Integrated, Substantial Leverage to Permian Growth
Plains’ Permian System: Highly Integrated, Substantial Leverage to Permian Growth Gathering Intra-Basin Long-Haul Capacity(1): ~3.7 MMB/d Capacity(1): ~3.1 MMB/d Capacity(1): ~1.7 MMB/d Representative Net Revenue(2):+/- $0.60 - $1.60/bbl Representative Net Revenue(2): +/- $0.20 - $0.40/bbl
Slide 30: Crude Oil Hub Terminals
Crude Oil Hub Terminals: Leading Market-Hub Positioning Enables Pipeline & Commercial Opportunities, Strong Connectivity Supports Demand Cushing Permian(1) (27MM capacity) (19MM capacity) Patoka St. James (7MM capacity) (15MM capacity) Inbound Pipelines (includes direct & (1) Capacity includes all P
Slide 31: Crude Oil Segment Detailed Data (2019 – 2022)
Crude Oil Segment Detailed Data (2019 – 2022) Crude Oil Segment Considerations / Context: Pipeline Tariff Volumes(1) (Mb/d) – COVID-19 production reset - L48 onshore ↓ >2MMB/D from Mar-20 peak, 6,807 6,911 6,974 7,202 7,159 7,417 7,581 6,201 6,522 5,656 5,868 5,835 5,430 6,006 6,162 competitive ma
Slide 32: NGL Segment: Integrated & Strategically Positioned Assets
NGL Segment: Integrated & Strategically Positioned Assets Aggregate, process, transport & sell Directional Illustration Co-Ed Pipeline PAA Capacities Ownership: 100% Fort Saskatchewan Fractionation ~200 Mb/d Capacity: 70 Mb/d Ownership: 100% PFS, 21% KFS Capacity: 105 Mb/d(2) Frac (~85 PFS / ~20 KFS
Slide 33: NGL Segment 2022(G) Detail: +/- 20% Total Adj. EBITDA
NGL Segment 2022(G) Detail: +/- 20% Total Adj. EBITDA C3+ Fractionation & Marketing 2022(G): $495MM Adj. EBITDA(3) ~10% – Hedge frac spread (12+ months rolling) Unhedged C3+ Fractionation & Marketing – Purchase AECO nat gas & sell spec products (C3+) on Mont Belvieu pricing(1) – ~55 Mb/d of total
Slide 34: NGL Segment Frac Spread & Hedging Profile
NGL Segment Frac Spread & Hedging Profile 2023 NGL Adj. EBITDA could be ~$100MM below 2022 Hedging Profile (2019 – 2022(G)) (table data reflects full-year averages) 2019 2020 2021 2022(G) – Lower anticipated C3+ Spec Product Sales as a result of a 3rd party turnaround & absence of 2Q22 weather ben
Slide 35: NGL Segment Detailed Data (2019 – 2022)
NGL Segment Detailed Data (2019 – 2022) NGL Segment Considerations / Context: – ~$175MM in non-core asset sales since 2019 Fractionation (Mb/d) – Seasonally stronger demand / sales in winter months 157 154 137 140 142 144 137 129 129 127 134 – Frac spread hedging & 3rd party contracts helps improv
Slide 36: Additional NGL Detail: Fractionation Volumes by Asset
Additional NGL Detail: Fractionation Volumes by Asset (Mb/d) Fort Sask Empress 59 24 24 53 54 55 23 23 51 49 50 50 22 46 48 45 45 20 20 20 20 42 42 18 18 18 19 17 29 12 (1) (2) 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q2
Slide 37: Commitment, Capacity & Continuous Improvement
Commitment, Capacity & Continuous Improvement Driven by a Culture of Always “Doing the Right Thing” 2022 Announced hydrogen 2021 and battery emerging energy opportunities 2020 Formed the HSES Board Committee Refreshed sustainability Published sustainability materiality assessment presentation with t
Slide 38: Emission in Perspectives
Emission in Perspectives (mmt CO2e) Total Scope 1 + Scope 2 GHG Emissions vs. Peers(1) Worldwide 20 Emissions (mmt CO2e)(2) 15 43,100 10 Energy & Non-energy Sources 5 36,800 Energy Sources 0 A B C D E F G Plains H U.S. Emissions (mmt CO2e)(3) PAA Total Scope 1 + Scope 2 GHG Emissions 6,600 Energy &
Slide 39: Meaningful Multi-Year Progress in Key Safety & Environmental Metrics
Meaningful Multi-Year Progress in Key Safety & Environmental Metrics Committed to protecting the health & safety of employees, contractors & communities where we operate Recordable Injuries Federally Reportable Releases 50 1.440 1.35 45 1.3 35 1.25 46 1.2 1.15 40 43 1.1 Total #30of 1.05 35 1 Injurie
Slide 40: Free Cash Flow: Historical Detail
Free Cash Flow: Historical Detail GAAP CFFO to Non-GAAP FCF 2016 2017 2018 2019 2020 1Q21 2Q21 3Q21 4Q21 2021 1Q22 2Q22 3Q22 YT D Net Cash Provided by Op. Activities (GAAP) $ 733 $ 2,499 $ 2,608 $ 2,504 $ 1,514 $ 791 $ 235 $ 336 $ 635 $ 1,996 $ 340 $ 792 $ 941 $ 2,074 Net Cash (Used in) / Provided b
Slide 41: Definitions
Definitions Adjusted EBITDA: adjusted earnings before interest, taxes, depreciation and amortization (Consolidated) − Attributable to PAA where noted; Segment Adjusted EBITDA by definition is attributable to PAA Implied Distributable Cash Flow (DCF) Per Common Unit & Common Unit Equivalent (CUE)
Slide 42: Investor Presentation Fourth-Quarter 2022
Investor Presentation Fourth-Quarter 2022
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