Plains All American Pipeline (PAA) Q3 2024 earnings summary

Executive summary

• Q3 2024 Adjusted EBITDA attributable to PAA was $659M, with strong execution and performance trending toward the high end of full-year guidance of $2.725B–$2.775B.

• Net income attributable to PAA was $220M for Q3 2024, up 8% year-over-year, and $736M for the first nine months of 2024, down from $918M in 2023 due to higher costs from the Line 901 incident and increased taxes.

• Completed bolt-on acquisition of Five Stones Permian gathering system, supporting growth and enhancing the portfolio.

• Moody’s upgraded credit rating to Baa2 with a stable outlook, achieving mid-BBB at all three agencies.

• Settled remaining material Line 901 claims, incurring a $120M charge and resolving all significant litigation.

Financial highlights

• Q3 2024 revenue was $12.74B, up from $12.07B in Q3 2023; total revenues for the first nine months of 2024 were $37.67B, up 5% year-over-year.

• Q3 2024 Adjusted EBITDA was $805M, up 3% year-over-year; for the nine months ended September 30, 2024, Adjusted EBITDA was $2.46B, up 7% from 2023.

• Adjusted Free Cash Flow for 2024 is projected at ~$1.45B, with $1.15B allocated to common and preferred distributions.

• Q3 2024 net income per common unit was $0.22, up 10% year-over-year; adjusted net income per unit was $0.37.

• Distribution per common unit for Q3 2024 was $0.3175, up 19% year-over-year.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA is expected at the high end of $2.725B–$2.775B guidance.

• 2024 Adjusted Free Cash Flow projected at approximately $1.45B, including acquisition capital and legal settlements.

• Projected 2024 investment capital is approximately $455M ($360M net to interest), with about half for Permian JV assets.

• Maintenance capital for 2024 is projected at $270M ($250M net to interest), funded primarily with retained cash flow.

• Management targets multi-year, sustainable distribution growth, with a $0.20/unit increase in 2024 and ~$0.15/unit annual growth planned for 2025+.