Plains GP Holdings (PAGP) Q2 2024 earnings summary

Executive summary

• Second quarter 2024 Adjusted EBITDA attributable to PAA was $674 million, exceeding expectations and driven by strong execution, robust segment performance, and bolt-on acquisitions.

• Net income attributable to PAA was $250 million for Q2 2024, with net cash from operating activities at $653 million.

• Full-year 2024 Adjusted EBITDA guidance midpoint raised by $75 million to a new range of $2.725 billion–$2.775 billion, reflecting year-to-date performance and M&A contributions.

• Production outlook for 2024 remains an increase of 200,000–300,000 barrels per day, with growth weighted to the back half of the year.

• Plains GP Holdings derives cash flow primarily from its indirect investment in Plains All American Pipeline.

Financial highlights

• Q2 2024 revenue was $12.93 billion, up from $11.60 billion in Q2 2023, with net income attributable to PAA down 15% year-over-year to $250 million.

• Adjusted EBITDA attributable to PAA rose 13% year-over-year to $674 million, with Crude Oil segment Adjusted EBITDA at $576 million and NGL segment at $94 million.

• Adjusted Free Cash Flow (excluding changes in assets & liabilities) was $421 million for Q2 2024 and is forecast at $1.55 billion for 2024.

• Distributable Cash Flow available to common unitholders for 2024 is projected at $1.7 billion, with a coverage ratio of 190%.

• Distribution per common unit declared for Q2 2024 was $0.3175, a 19% increase year-over-year.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance raised to $2.725–$2.775 billion; Adjusted Free Cash Flow guidance reiterated at $1.55 billion.

• Permian production growth guidance maintained at 200,000–300,000 barrels per day, with a back-half weighted ramp.

• Capital investment for 2024 expected to be ~$375 million net to PAA, with maintenance capital at $250 million net.

• Expectation of a more durable and resilient cash flow profile, supported by contract extensions and a shift to more fee-based NGL cash flow.

• Long-term leverage ratio target maintained at 3.25x–3.75x.