On August 2, 2024, Plains All American Pipeline LP (PAA, Financial) released its 8-K filing reporting robust second-quarter 2024 results and an upward revision of its full-year 2024 Adjusted EBITDA guidance. Plains All American provides transportation, storage, processing, fractionation, and marketing services for crude oil, refined products, natural gas liquids, liquefied petroleum gas, and related products. The company's assets span the United States and Alberta, Canada, with a significant concentration in the Permian Basin.
Second-Quarter Financial Highlights
Plains All American Pipeline LP (PAA, Financial) reported net income attributable to PAA of $250 million and net cash provided by operating activities of $653 million for the second quarter of 2024. The company delivered Adjusted EBITDA attributable to PAA of $674 million and generated Adjusted Free Cash Flow of $421 million, excluding changes in assets and liabilities and including bolt-on acquisition capital.
In addition, PAA successfully priced a public offering of $650 million of unsecured senior notes at 5.7% due in 2034. The company raised the mid-point of its full-year 2024 Adjusted EBITDA guidance by $75 million to a new range of $2.725 - $2.775 billion and reiterated its full-year 2024 Adjusted Free Cash Flow guidance of $1.55 billion.
Performance Analysis
Plains All American Pipeline LP (PAA, Financial) missed analyst estimates for the second quarter, with reported earnings per share (EPS) of $0.26 compared to the estimated $0.37. The company's revenue for the quarter was $13,052.92 million, aligning with the estimated revenue.
The Crude Oil segment's Adjusted EBITDA increased by 9% year-over-year, primarily due to higher tariff volumes on pipelines, tariff escalations, and contributions from acquisitions. However, these gains were partially offset by fewer market-based opportunities. The NGL segment saw a significant 52% increase in Adjusted EBITDA, driven by turnarounds impacting sales volumes in the second quarter of 2023 and incremental margins from iso-to-normal butane spread benefits in the second quarter of 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Income Attributable to PAA | $250 million | $293 million | -15% |
| Adjusted EBITDA | $807 million | $700 million | 15% |
| Adjusted Free Cash Flow | $411 million | $650 million | -37% |
| Distribution per Common Unit | $0.3175 | $0.2675 | 19% |
Commentary and Outlook
“Today’s announcements reflect another solid quarter with results exceeding expectations in both the Crude Oil and NGL segments. Based on our performance to-date and outlook for the remainder of the year, we are increasing our annual EBITDA guidance for 2024. This underscores the resilience of our business model and highlights the flexibility of our asset base to capture opportunities in a dynamic and evolving market,” said Willie Chiang, Chairman & CEO of Plains.
Plains All American Pipeline LP (PAA, Financial) continues to focus on maximizing long-term value for investors through capital discipline, generating meaningful Free Cash Flow, and increasing the return of capital to equity holders while maintaining financial flexibility. The company's strong performance in the Crude Oil and NGL segments, coupled with strategic acquisitions and effective cost management, positions it well for sustained growth in the dynamic oil and gas industry.
For more detailed financial information and analysis, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Plains All American Pipeline LP for further details.
