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Date

Friday, Aug. 8, 2025 at 2:00 p.m. ET

Call participants

Chief Executive Officer — Willie Chiang

Executive Vice President & Chief Financial Officer — Al Swanson

Executive Vice President & Chief Commercial Officer — Jeremy Goebel

Chief Operating Officer — Chris Chandler

Vice President, Investor Relations — Blake Fernandez

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Takeaways

Adjusted EBITDA (Consolidated)-- Adjusted EBITDA for the second quarter of fiscal 2025 (period ended June 30, 2025) was $672 million, with the majority now coming from continuing crude oil operations, following the reclassification of the NGL segment as discontinued operations (as disclosed in connection with fiscal 2025 guidance).

Crude oil segment adjusted EBITDA-- The crude oil segment generated $580 million in adjusted EBITDA in the second quarter of fiscal 2025, driven sequentially by Permian volume growth, bolt-on acquisitions, and resumed refiner throughput.

NGL segment adjusted EBITDA-- The NGL segment reported $87 million in adjusted EBITDA in the second quarter of fiscal 2025, reflecting a sequential decline due to seasonality and lower quarter-on-quarter frac spreads.

NGL business divestiture-- Definitive agreements were signed in June 2025 to sell substantially all NGL assets to Keyera for approximately $3.75 billion, with close targeted in 2026; management expects approximately $3 billion in net proceeds from the sale, with an expected close in 2026 and a streamlined crude oil-focused portfolio.

Bolt-on acquisitions-- Five acquisitions completed year-to-date, totaling approximately $800 million, including an additional 20% interest in BridgeTex Pipeline Company LLC for $100 million in cash (announced in the second quarter of fiscal 2025), raising Plains’ ownership to 40%.

Fiscal 2025 adjusted EBITDA guidance-- Adjusted EBITDA guidance for fiscal 2025 (period ending Dec. 31, 2025) is confirmed at $2.8 billion to $2.95 billion, with management indicating expectations are likely to be in the lower half of their respective ranges for both EBITDA and anticipated Permian growth of 200,000-300,000 barrels per day for the full year.

Fiscal 2025 adjusted free cash flow guidance-- Adjusted free cash flow for fiscal 2025 is approximately $870 million, excluding changes in assets and liabilities, reflecting the impacts of bolt-on acquisitions, the BridgeTex transaction, and increased growth capital.

Fiscal 2025 growth capital expenditure guidance-- Fiscal 2025 growth capital guidance increased by $75 million to $475 million to fund new Permian and South Texas lease connects, Permian terminal expansions, as well as project delays and scope changes.

Fiscal 2025 maintenance capital guidance-- Maintenance capital for fiscal 2025 is trending at $230 million, which is $10 million below the initial forecast.

Retained U.S. NGL assets-- Expected to generate $10–$15 million of EBITDA in fiscal 2025 and estimated to be worth $100–$200 million, with management indicating these are minor and likely to be divested.

Distribution growth messaging-- Al Swanson stated, "No intended shift in messaging at all. We intend to grow our distribution over a multiyear period." clarifying slide wording changes do not affect the distribution outlook.

Crude pipeline contract roll-offs-- Noted impact from contract rate roll-offs for Cactus II, Cactus I, and Sunrise pipelines in the second half of fiscal 2025, partially offset by production growth and FERC escalators.

Summary

Plains All American Pipeline(PAA 1.01%) reported adjusted EBITDA of $672 million in the second quarter of fiscal 2025 and reiterated its full-year EBITDA guidance for fiscal 2025, with the expectation that results will be in the lower half of the stated range. Management emphasized execution on its strategy through the sale of the majority of its NGL segment for approximately $3.75 billion, announced in June 2025, and active deployment of capital into bolt-on crude oil-focused acquisitions, such as increasing its ownership in BridgeTex Pipeline to 40%. The fiscal 2025 growth capital guidance was increased to $475 million to capture new project opportunities, while maintenance capital for fiscal 2025 was revised lower to $230 million. With approximately $3 billion in anticipated net proceeds from the NGL sale, expected to close in 2026, Plains signaled flexibility for future investments and capital returns, and clarified that its distribution policy remains focused on multiyear, sustainable growth. The company outlined the expected second-half impacts of contract roll-offs for key pipelines and detailed that retained U.S. NGL assets are immaterial and earmarked for likely divestiture.

Jeremy Goebel noted, "we have to beat our return thresholds, our cost of capital by 300 to 500 basis points" when evaluating acquisitions.

Chris Chandler indicated, about $30 to $40 million of deferrals from last year are included in the fiscal 2025 capital program.

Management affirmed that both Plains and ONEOK will work collaboratively to optimize the BridgeTex Pipeline’s utilization and cost structure.

Recent capital allocation has prioritized crude-focused opportunities, with NGL business proceeds to be redeployed primarily within the liquids business segment.

Al Swanson clarified that guidance targets the "lower half, not the lower end," of the full-year fiscal 2025 EBITDA and Permian growth guidance ranges, citing ongoing market volatility.

Industry glossary

Bolt-on acquisition: A targeted purchase of assets or ownership interests that are integrated with a company's existing operations to achieve synergies or strategic benefits.

Frac spread: The differential between the price of natural gas liquids extracted from natural gas (such as ethane, propane, butane) and the cost of natural gas, used as a profitability metric for NGL producers.

FERC escalator: Automatic tariff adjustments on regulated pipeline assets, set by the Federal Energy Regulatory Commission, that periodically increase pipeline transportation rates according to federal guidelines.

Full Conference Call Transcript

Willie Chiang: Thank you, Blake. Good morning, and thank you for joining us today. Earlier this morning, we reported solid second quarter adjusted EBITDA attributable to Plains of $672 million, which I will cover in more detail. In June, we announced the execution of definitive agreements to sell substantially all of our NGL business to Keyera for approximately $3.75 billion, with an expected close in 2026. Initial investor feedback has been positive, and we view this as a win-win transaction for both parties. Plains will exit the Canadian NGL market at an attractive valuation while Keyera will receive highly complementary critical infrastructure in a strategic market.

From a Plains perspective and as highlighted on Slide 4, this transaction will result in a streamlined crude oil midstream entity with less commodity exposure, a more durable and steady cash flow stream, and substantial financial flexibility to further execute on our capital allocation framework. With approximately $3 billion of net proceeds from the sale, we expect to continue focusing on disciplined bolt-on M&A to extend and expand our crude oil-focused portfolio as well as opportunities to optimize our capital structure, including potential repurchases of Series A and B preferred units, along with opportunistic common unit repurchases.

Building upon the foundation of our disciplined capital allocation framework, we announced a bolt-on acquisition of an additional 20% interest in BridgeTex Pipeline Company LLC for an aggregate cash consideration of $100 million net to Plains. This brings our overall interest in the joint venture to 40%. Both Plains and ONEOK have extensive upstream gathering systems, and both companies are committed to optimizing the operating capacity on the pipeline. In addition, this transaction is expected to provide risk-adjusted returns in line with Plains' bolt-on framework. Year to date, we've completed five bolt-on transactions totaling approximately $800 million, and we've consistently maintained the view that there is a runway of opportunities for Plains to advance its bolt-on strategy.

As illustrated on Slide 5 and as proven over the last few years, we continue to execute on that backlog of opportunities. Additionally, the financial flexibility that will be created by our recent NGL announcement further enhances our commitment and capacity to pursue these and other opportunities provided they offer attractive returns. With that, I'll turn the call over to Al.

Al Swanson: Thank you, Willie. Prior to discussing further details of our second quarter results, I would like to reiterate that following our NGL announcements, the majority of the NGL segment has been reclassified as a discontinued operation. To ensure consistent financial disclosure to the market, we have also included pertinent information reconciling these changes with our original 2025 guidance for the NGL segment. Turning to the second quarter, we reported crude oil segment adjusted EBITDA of $580 million, which benefited sequentially from Permian volume growth, contributions from recent bolt-on acquisitions, and higher throughput associated with our refiner customers returning from downtime in 2025.

Moving to the NGL segment, we reported adjusted EBITDA of $87 million, which stepped down sequentially due to normal seasonality and lower quarter-on-quarter frac spreads. Slides 6 and 7 in today's presentation contain adjusted EBITDA walks that provide additional details on our performance. Regarding guidance, our full-year 2025 EBITDA range of $2.8 to $2.95 billion remains intact. Consistent with our communication last quarter, in the prevailing environment, both our EBITDA guidance and the Permian growth outlook of 200,000 to 300,000 barrels per day would likely be in the lower half of their respective ranges. A summary of our 2025 guidance metrics is located on Slide 8.

As for capital allocation, as illustrated on Slide 9, for 2025, we expect to generate approximately $870 million of adjusted free cash flow excluding changes in assets and liabilities. Our adjusted free cash flow guidance reflects the impact of bolt-on acquisitions, including the acquisition of the interest in BridgeTex Pipeline, as well as our revised 2025 growth capital guidance, which has increased $75 million to $475 million. The capital investment increase is primarily associated with new projects, including Permian and South Texas lease connects, and Permian terminal expansions, in addition to weather delays and scope changes on other projects.

While 2025 growth capital was above our initial guidance, maintenance capital is trending closer to $230 million, which is $10 million below our initial forecast. With that, I'll turn the call back to Willie.

Willie Chiang: Thanks, Al. As illustrated on Slide 10, we've made significant progress on our strategy over the last several years. This begins with a portfolio of world-class assets, value has been unlocked through the capabilities of our Plains team along with collaboration with our customers. Our strategy is grounded in our established financial priorities, with a focus on generating substantial free cash flow, maintaining financial flexibility, and increasing return of capital to our unitholders through disciplined execution in each of these areas. The divestiture of our NGL business marks a significant step in the strategic direction of Plains.

By reallocating resources and capital towards our legacy crude oil operations, where we have significant size and scale, we will be better positioned to enhance our focused portfolio. This move not only increases our financial flexibility but also underscores our resolve to streamline operations and drive growth while generating strong returns for our unitholders. Our strategy centers on the view that crude oil will remain essential to global energy and society for decades. Despite near-term volatility, we're confident in our ability to navigate current dynamics, and we expect fundamentals to improve longer term due to continued population and economic growth driving demand.

We anticipate that new OPEC plus supply will be absorbed, reducing spare capacity, and limited long lead project and resource additions will increase the reliance on North American onshore production. Plains will continue to be a vital infrastructure provider meeting the growing need for reliable energy across global markets. In closing, our efficient growth strategy, financial flexibility, and commitment to execution have positioned us well to capitalize on opportunities and manage challenges with resilience. I'm confident in our position. At this point, we'll look forward to your questions. Blake, would you lead us into Q&A?

Blake Fernandez: Thanks, Willie. As we enter the Q&A session, please limit yourself to two questions. For those with additional questions, please feel free to return to the queue. This will allow us to address questions from as many participants as possible in our available time this morning. The IR team will also be available after the call to address any additional questions you may have. Latif, would you please open the call for questions?

Operator: Sir, as a reminder, to ask a question, you will need to press 11 on your telephone. Our first question comes from the line of Manav Gupta of UBS. Please go ahead, Manav.

Sonia (for Manav Gupta): Hi. This is Sonia on for Manav. Good morning, and congrats on the quarter. When you think about assets in the Mid Con, there may be more one-time step-ups in synergy versus the Permian that could have more organic growth on top of. So when we look at more bolt-on strategies and M&A, how do you factor in the sensitivity to basin-level growth? And in general, with basins, are you seeing more frozen over time?

Jeremy Goebel: Sandy, good morning. This is Jeremy. Here's what I would say. We take all that into consideration and candidly, as we've said before, we're a DCF shop, and we're looking for discounted cash flow over time and contributions. You have to look at the integrated network. So take the Mid Continent, for instance, which is an example. We have a lot of assets that touch a lot of other areas. So things that could impact Cushing or other downstream pipelines may have multiple touchpoints.

So while the Permian has different resources, we look at them independently and use market fundamentals to drive an outlook of the cash flows, and we use discounted cash flow, and we have to beat our return thresholds, our cost of capital by 300 to 500 basis points as we've said. So we take all that into consideration. Not necessarily going to say where our target area is right now, but we do look at everything and have to hit our return threshold. And we certainly take a look at fundamentals and the multiple touchpoints we can have in each area.

Sonia (for Manav Gupta): Got it. Thank you. And then on the map side more, could you provide some color on real-time demand signals, any sign of slowdown or anything you're seeing on the refining or on the export side?

Jeremy Goebel: Yes, ma'am. This is Jeremy again. Here's what I would say. I would follow the refiners. They've all talked about improving diesel demand and feel like it's strong. The last six months have felt a lot better than the prior six months from a demand perspective. We haven't seen the slowdown in demand most were expecting. And we expect that to continue. Willie mentioned that in his notes. So I'd say continue to follow the refiners and their demand. We're not seeing any issues from the downstream refining signals from crack spreads internationally and domestically. Differentials do move, and that's some indication, but over the last six-month period, we've seen strengthening demand, and we look forward to that continuing.

Willie Chiang: Yes, Sonia. This is Willie. One comment I would add to that is that we're all watching a lot of uncertainty, certainly, over the last number of months and even years. Our view is continued short-term volatility, longer-term, more constructive. And where I would tell you our view is despite a lot of the uncertainties, I have more confidence in the world and its ability to continue to grow than I did probably over the past year. So, our views are pretty constructive, but still think there will be a lot of volatility short term.

Sonia (for Manav Gupta): Great. Thank you.

Operator: Thank you. Our next question comes from the line of Gabriel Moreen of Mizuho. Please go ahead, Gabriel.

Gabriel Moreen: Hey. Good morning, everyone. Can I just ask on the BridgeTex deal and maybe talk about how that pipe is situated currently contractually, maybe how it would fit with the rest of your business? The value also seems to be a little bit, you know, changed from what it may have transacted out in the past. So if you can speak to that as well.

Jeremy Goebel: Hi, Gabe. This is Jeremy. We're excited about the outcome consolidating that interest with ONEOK. I think from a contracting perspective, it's best to speak with them. But one thing is as part of this transaction, we work with ONEOK to optimize cost structure going forward, as well as to consider commercial ways to fill the pipeline from Plains and ONEOK's gathering systems to help keep the pipeline full. I think us working together will strengthen the positioning of the pipeline longer term.

Gabriel Moreen: Thanks, Jeremy. And then maybe if I can ask in terms of some of the CapEx ins and outs on the growth CapEx raise here. For the lease connects in South Texas and the Permian, does that imply some degree of greater activity than you had been seeing, or is it just, you know, some degree of noise in terms of just things going on during the course of the year?

Chris Chandler: Hey. Good morning, Gabe. It's Chris Chandler. I'll take this one. So, yeah, we have increased our 2025 investment CapEx guide to $475 million. That's Plains. We've developed some new opportunities related to the Permian and Eagle Gathering, as you mentioned, in additional storage opportunities in the Permian. Some of this is basin growth-related, but some of it's frankly capturing business that we did not have before. They're good investments. They exceed our return thresholds. And they weren't in our original guidance, hence being a new opportunity. So I hope that helps.

Gabriel Moreen: Appreciate it. Thanks, Chris.

Operator: Our next question comes from the line of Michael Blum of Wells Fargo.

Michael Blum: Thanks. Good morning, everyone. Willie, I want to ask kind of a big picture question. You addressed some of this at the end of your remarks, but you know, you've made a big step here. You've exited the NGL business in Canada. You're now more or less solely focused on crude. So my question is, is the plan to simply execute the growth and capital return strategy as it is, as you've been doing? Or could you see the company pivoting or diversifying into another area, whether that be expanding the crude footprint more expansively or into a whole different line of business? Just want to get your sort of high-level thoughts there.

Willie Chiang: Sure, Michael. Going to a pure play was not the objective. Right? Our objective is to create value for the unitholders however we possibly can. And so for us, you know, I've articulated this efficient growth strategy and we've been executing on being able to unlock that. Now practically speaking, our business was roughly 80-85% crude, 15-20% NGL. By being able to do this transaction, it really catalyzes a lot of opportunities for us within Plains, which is why I spend a little more time in my prepared comments talking about that. One, we're going to be able to redeploy approximately $3 billion.

Can't say exactly how it's going to be redeployed, but there's a number of opportunities that we've articulated on the bolt-on acquisitions, capital structure, opportunistic unit buybacks. And if you think about the cash flow that we've sold at a great valuation, we think we can do better redeploying it in the liquids business. When you think about how do you create value, it's all around synergies. And it's difficult to capture synergies if you don't have a strong position somewhere. So this is kind of a long-winded answer of saying, we're going to stick to what we know. We've got size and scale. Really, a premier competitor in the industry providing a lot of services for our customers.

And we're going to parlay on that and try to build even a stronger system kind of anchored on the platform of our constructive view of oil markets going forward. So if there are other opportunities that we can, whether it's in different basins or other commodities, we absolutely look at all those. We've got a very robust BD team. But, practically speaking, I think you're going to see more of it around the crude assets, and we feel we have a good runway of opportunities to look at. So, hopefully, that's helpful.

Michael Blum: It is. So thank you for that. And then second, wanted to ask, and I might be nitpicking here, so apologies upfront. But on Slide 9, the language on distribution growth changed a little bit. It used to say targeting multiyear sustainable distribution growth, and this latest slide deck says targeting sustainable distribution growth. So want to see if there's a shift in messaging there that we should be aware of. Thanks.

Al Swanson: Hey, Michael. This is Al. No intended shift in messaging at all. We intend to grow our distribution over a multiyear period. So no intent there. Clearly, in the very interim time, as Willie mentioned, we need to redeploy these proceeds. We fully expect to redeploy them in a way that's accretive to DCF, which would further enhance our ability to grow the dividend.

Michael Blum: Thank you.

Willie Chiang: Thanks, Michael.

Operator: Our next question comes from the line of Spiro Dounis of Citi. Please go ahead, Spiro.

Spiro Dounis: Thanks, operator. Good morning, gentlemen. I wanted to first ask about the 2025 guidance. It seems to suggest maybe a similar second half to the first half, if not maybe even a little bit lower. And so I'm curious, is that consistent with how you're viewing the back half of the year? And I guess, why would that be the case? It seemed like volumes are trending up kind of nicely this quarter. Willie, I know you mentioned some volatility out there, so maybe it's just that. But you've also got the contribution from some bolt-ons. So just looking to get some color there in the back half.

Jeremy Goebel: Good morning, Spiro. It's Jeremy. Remember, we have the contract roll-offs of Cactus II, Cactus I, and Sunrise in the second half of the year, all consistent with guidance. So those roll off of the contract rates, all those volumes have been recontracted. It's a function of rate being lower. So you had those contributions in the first half. You're going to have the growing production, the FERC escalator, and other pieces contributing to backfill that. So while it may look flat, you back some of the roll-off of the contracts with growth.

Spiro Dounis: Got it. It's helpful, Jeremy. Thank you. So second question, just maybe going to the bolt-on strategy again. Guess, how should we think about your ability to keep doing these bolt-ons for the rest of the year, pending that NGL sale? I don't imagine you want to pre-spend that $3 billion. But as you do think about getting those proceeds, you could obviously do a lot more than a bolt-on with that $3 billion. So I guess I'm just curious how you're weighing the ability or maybe potential to do something larger?

Willie Chiang: Well, Spiro, it's very difficult to time all these things, as you well know. Which is why I mentioned our robust BD team looking at a lot of things. What I would tell you is that's the other reason of our financial flexibility creating a lot of capacity on our balance sheet to be able to absorb some of that. So where I think we're positioned, where we are positioned at is we look at a lot of opportunities. And as they come up, we're trying to put ourselves in the best position to be able to execute on them, whether they're small, medium, or even large. So I'll leave it at that.

Spiro Dounis: Helpful as always. Thank you, gentlemen. Have a good weekend.

Willie Chiang: Thank you.

Operator: Our next question comes from the line of Sunil Sibal of Seaport Global. Please go ahead, Sunil.

Sunil Sibal: Yes. Hi. Good morning. And most of my bigger questions have been hit, but I just wanted to clarify a couple of things. On the BridgeTex, so you're buying that as part of the ORIX JV?

Jeremy Goebel: Correct. Sunil, this is Jeremy. No. That's independent. That is Plains purchasing that. We're an existing owner in the JV, and Plains and ONEOK are buying in proportionate to their interest in the pipeline.

Sunil Sibal: Okay. Understood. And then in terms of the overall positioning, it seems like you're still retaining some US NGL business. If that's correct, you know, is there a bigger strategy there? How should we think about, you know, that piece of the business going forward?

Jeremy Goebel: Sunil, that's very minor and relative to the entire asset base. Those were smaller contributors. And from a tax perspective and operations perspective, it made sense for us to retain, and we'll look to monetize those at a later date. But I would say that's not part of the larger strategy. You'd see us more likely to divest those than retain them.

Sunil Sibal: Got it. Thank you.

Willie Chiang: Thanks, Sunil.

Operator: Our next question comes from the line of John Mackay of Goldman Sachs. Please go ahead, John.

John Mackay: Hey, guys. Thank you for the time. Maybe just wanted to touch on the CapEx piece again this year. I mean, how much of that increase do you think is maybe actually a pickup in producer activity overall relative to what you're expecting, or maybe that's more of just a, you know, you guys had some commercial success, but it's not necessarily pointing to kind of a broader macro theme. And then maybe just taking that neck looking forward, you know, why shouldn't we think of the kind of run rate CapEx number moving up a little bit if you guys were able to get these wins? Thanks.

Chris Chandler: John, it's Chris Chandler. I'll take that. It's really a combination of all the above factors that you mentioned. You know, there's certainly new opportunities that we didn't anticipate coming into the year, and those played a role. I'd also point out our continued bolt-on acquisition strategy brings new opportunities for synergy capture around those assets where we didn't have operations before. So it's really kind of an all of the above. When you think in 2026 on investment capital spend, we're obviously not giving guidance at this point in time. We'll do that in early 2026. You can look at how much we're spending on NGL this year, which is above average compared to prior years.

So, you know, we would expect that to step down when the NGL sale to Keyera closes. But we continue to be successful identifying new opportunities. So, you know, in respect of identifying and capturing those projects that meet our investment threshold, you know, we'd love to grow CapEx modestly because of the good opportunities that we're able to capture.

Blake Fernandez: Hey, John. It's Blake. If you don't mind real quick, I would add, just as a reminder, the 2025 CapEx program includes about $30 or $40 million of deferrals from last year. So that might help you think about the progression into 2026.

John Mackay: Makes sense. That's helpful. And then maybe just going back to your comments on the retained NGL assets, I think your answer before made sense. I understand they're small. But are you guys able just to quantify for us again what that looks like right now? And then maybe is that reflecting kind of a 2025 spread environment, or is that a pretty good whatever you share, is that a pretty good number going forward? For now at least.

Chris Chandler: I can put that in the $10 to $15 million of EBITDA category. And just from a valuation standpoint, think of the $100 to $200 million range.

John Mackay: That's helpful. I appreciate that. Thank you guys for the time.

Operator: Thanks, John. Our next question comes from the line of Brandon Bingham of Scotiabank.

Brandon Bingham: Hey. Good morning. Thanks for taking the questions here. Just one quick one for me. I know it says in the slides that you still expect to come in towards the lower end of the EBITDA guide, but things have improved even just slightly versus all the one Q chaos. So just kind of curious where you see that as we move forward throughout the year and whether or not there's a higher likelihood now that we could be back towards the midpoint.

Al Swanson: This is Al. I'll take a shot at it. I think the wording should have been lower half, so we weren't trying to point at the low end by any means if that's what the question was. And we believe the lower half would be what we're trying to guide it. We're not trying to guide you to the midpoint or the bottom end, but just the lower half. Clearly, there's a period of time here. Prices have been fairly volatile. I think crude oil today is roughly where we articulated the range to be a quarter ago in the $60 to $65 range. I think we're kind of at the high end of that now.

So more time to come with regard to that, but we would kind of point you to the lower half, not the lower end.

Brandon Bingham: Okay. Apologies. I might have misread, but thank you.

Operator: Thank you. I would now like to turn the conference back to management for closing remarks.

Willie Chiang: Latif, thanks, and thanks to everyone for joining us today. We'll look forward to giving you more updates, and we'll see you on the road. Have a great day and a great weekend.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.