Good day and thank you for standing by. Welcome to the PAA and PAGP First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Thank you, Michelle. Good morning and welcome to Plains All American first quarter 2025 earnings call. Today's slide presentation is posted on the Investor Relations' website under the News and Events section at ir.plains.com. An audio replay will also be available following today's call. Important disclosures regarding forward-looking statements and non-GAAP financial measures are provided on Slide 2. An overview of today's call is provided on Slide 3, a condensed consolidating balance sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Willie Chiang, Chairman and CEO; Al Swanson, Executive Vice President and CFO, along with other members of the management team. With that, I will turn the call over to Willie.

Thank you, Blake. Good morning everyone and thank you for joining us. This morning, we reported solid first quarter performance, with an adjusted EBITDA attributable to Plains of $754 million, which Al will cover in more detail. Before providing an update on our efficient growth initiatives, I'd like to offer some thoughts on the current market and policy environment. The ongoing uncertainty on trade tariffs is weighing on economic forecasts and creating significant volatility. Additionally, the dissension among OPEC members and the prospects of incremental supply coming to market has resulted in a lower price commodity than anticipated at the beginning of the year. Nevertheless, we believe a lower price environment will ultimately reinforce the cyclical nature of the commodity markets, leading to a constructive medium to long-term outlook. Slide 4 outlines several supply and demand dynamics that we believe will contribute to a supportive backdrop over time. Despite the current market volatility, our business remains resilient. Assuming a $60 to $65 WT environment persists for the remainder of the year, we would expect both our 2025 EBITDA guidance and Permian growth outlook could be in the lower half of the respective ranges. Our NGL segment remains largely insulated from lower commodity prices, with approximately 80% of our estimated C3+ Spec products sales hedged for 2025. In this environment, we believe it's more important than ever to remain focused on what we can control. As a result, we continue to execute on our efficient growth strategy, generating significant free cash flow, maintaining a highly flexible balance sheet, where our leverage ratio remains towards the low end of our target range, and returning capital to our unitholders. Turning to a few highlights. In our NGL segment, our transition to more fee-based earnings continues with our 30,000 barrel a day fractionation bottleneck project at Fort Sask having been placed into service during the second quarter, along with other expansions of our NGL and condensate gathering systems being completed throughout the year. These projects are supported by long-term customer commitments and enhance our integrated NGL value chain. In our crude segment, we had two small strategic transactions. We acquired the remaining 50% equity in the Cheyenne Pipeline in the Rockies; this asset serves as a vital connection between Guernsey and downstream crude oil pipelines, Saddlehorn and White Cliffs, in which Plains owns an equity interest. In May, we acquired Black Knight Midstream, a Midland Basin crude gathering system for approximately $55 million. Both transactions complement our existing asset base and build upon our track record of successful bolt-on transactions. As shown on Slide 5, over the last several years, we've successfully deployed approximately $1.3 billion into bolt-on acquisitions. We continue to believe these opportunities present attractive risk-adjusted returns, and our balance sheet flexibility provides the financial capacity to continue progressing the opportunity set. Before turning the call over to Al, I do want to say thank you and acknowledge our colleague, Harry Pefanis, our President and Co-Founder of the company. Harry's played an integral part in building Plains since its inception decades ago. We're very thankful for his relentless focus on developing lasting relationships, customer service, and operational excellence, together with an unwavering commitment to integrity, accountability, and teamwork. We wish Harry the very best in his retirement. With that, I'll turn the call over to you, Al.

Thanks, Willie. We reported first quarter crude oil segment adjusted EBITDA of $559 million, which was impacted by winter weather and higher-than-expected refinery downtime. These events drove volumes below expectations in the quarter. However, we have seen a recovery in April and May with a healthy ramp in our gathering volumes across our system. Moving to our NGL segment. We reported segment adjusted EBITDA of $189 million, which benefited from higher frac spreads and NGL sales volumes driven by stronger border flows. Slide 6 and 7 in today's presentation contains segment adjusted EBITDA walk that provide additional details on our first quarter performance. With regard to trade tariffs, I would like to provide an update since our last earnings call. Currently, the energy products imported into the United States from our Canadian operations are exempt under the USMCA, limiting the direct impact of tariffs on our business. While there is a fair amount of uncertainty in the markets today, you will see on Slide 8, we left our key assumptions unchanged for the year, including a $75 per barrel WTI price and 200,000 to 300,000 barrels per day of year-over-year Permian growth. Key sensitivities are provided within the slide, allowing investors to analyze various scenarios. As illustrated on Slide 9, we expect to generate strong cash flow this year, with adjusted free cash flow of about $1.1 billion, which excludes changes in assets and liabilities, and is reduced by approximately $635 million for acquisitions. With that, I'll turn the call back to Willie.

Thank you, Al. We're off to a solid start for the year, albeit in a more volatile and uncertain market. As shown on Slide 10, we continue to progress on our key financial objectives and are well-positioned to execute our strategy in a highly volatile environment. In summary, our strong balance sheet offers financial capacity and flexibility. We continue to demonstrate capital discipline while executing on our efficient growth strategy, including our focus on bolt-on acquisitions, and we remain committed to returning cash to our unitholders. Before we hand back to Blake, Harry, would you like to make a few comments?

Yes. Thank you. Willie, I appreciate that. And just before we go to Q&A, first, I'd like to thank Willie for his kind remarks and his leadership. I've enjoyed working with him over the last 10 years. He has a great team, and I can tell you the team is as strong as it's ever been. I'd also like to thank all of you for joining us on our quarterly earnings call and your continued interest in Plains. With that, I'll turn it over to Blake to lead us into Q&A.

Thanks, Harry. And again, congrats. 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 additional questions. Michelle, I think we're ready to go to the Q&A session, please.

Thank you. Our first question is going to come from the line of Gabriel Moreen with Mizuho. Your line is open, please go ahead.

Hey, good morning everyone. Congrats to Harry on the retirement and an excellent career at Plains. Wanted to ask first about capital allocation in the current environment. It seems like you're still committed to the distribution growth in 2026. But given the volatility in the unit price, was wondering if there's any thoughts on the shift to maybe spend more on buybacks versus distribution growth, again, given all the volatility out there?

Gabe, this is Al. I'll take a shot at it. No, really no change in our view. Focus will continue to be on distribution growth as the primary method for returning cash to shareholders. Unit repurchases are a component of our capital allocation; there’s no change there, opportunistic and based on market dislocation. We did buy a small amount in April, just as we were going into blackout. It was only about $7.5 million worth; I think it was about 475,000 units. It's a component, but I want to say there's been no change in our thinking around opportunistic and market dislocation. So, we'll see what the future brings.

Got it. Thanks, Al. I appreciate that. And then maybe if I could ask sort of on the M&A landscape. You've clearly continued success here with these tuck-in deals. Just with all the volatility out there, what is the latest you're seeing in terms of whether that volatility is a catalyst for doing more deals or do you think it's an impediment to price discovery in the current environment?

Yes. Gabe, this is Willie. I'll take that one. Clearly, more volatile markets create a little more questions. And what I would tell you is that good deals always take time to get to a win-win. And I think we're positioned very well to be able to do that because of the nature of our place in the value chain. We think we still have a pretty ample supply of opportunities out there and we continue to chase them. Maybe the only other thing to mention is, in an environment like this, capital discipline is absolutely critical, and we've taken a real hard look at risk-adjusted returns, but we expect to be able to secure more win-win deals throughout the year.

Thank you. Our next question will come from the line of Manav Gupta with UBS. Your line is open, please go ahead.

Good morning. Looks like you were able to bring up your fractionation complex in Canada. So help us understand the cadence of earnings in Canada now that this plant is up and running.

Manav, it's Chris Chandler. So, yes, we're excited to bring up the expanded capacity of 30,000 barrels a day at our PFS facility in Edmonton, Alberta. We brought it up just ahead of our new commercial contracts taking effect. They don't all ramp to full volume immediately; they'll ramp over the remainder of this year and a little into next year. This is also part of a multi-project effort, where we're doing some additional connectivity and gathering investments along that value chain that will also come online throughout 2025. So, I think you'll see that gradually contribute throughout the year and on a full run rate basis starting in 2026.

Okay. Can we get a few more details about the Black Knight Midstream Permian Basin, the deal you did for about $55 million? At the benefits of the deal and why you decided to go ahead with that one? Thank you.

Sure. This transaction is located in the heart of our Northern Midland Basin area. We managed this on behalf of the producer and their partners, and we negotiated the deal with them. It has long-term capital benefits that will help us link to other areas on the opposite side. It is in the prime part of the Northern Midland Basin. The producer associated with this system is one of their top assets, so we are very confident in the resource potential and the price we paid. As Willie mentioned, it’s a mutually beneficial deal; it is a positive outcome for our private equity partner who developed the asset and a significant long-term advantage for Plains to acquire it.

Thank you. Our next question is going to come from the line of Michael Blum with Wells Fargo. Your line is open, please go ahead.

Thanks. Good morning everyone. I was wondering if you can give us your latest thoughts on conversations with producers, what they're telling you, and just your latest outlook on Permian volumes. I realize you kept the guidance, 200,000 to 300,000 barrels, but where you think that's sort of really trending and also for 2026?

Sure, Michael. I'll take the 2025. But what I can tell you is you've already grown over 100,000 barrels a day from the end of last year to now. So, the 200,000 barrels a day does not seem very Herculean as a growth expectation for this. I'd say, by and large, the producers are in a very similar situation. It's a bit of wait and see. The volatility just started a month ago. And so you don't make two or three-year plans based on one month of activity, and you've seen some rebound in it. So I think in the next three months, it's a function of time and flat pricing. If it sustains for a longer period at this price, you will see some flattening out. If it goes below $55 a barrel, you've heard from the producer community that you would start to go flat and maybe even decline. If it gets above $65 for an extended period of time, you'll see it go the other way. You'll see it back to growth. So, from our standpoint, there's a bit of wait and see at this point. Our guidance here is just predicated on what could happen in the price range, but the volatility literally started a month ago. So it's a function of time and price.

And Michael, this is Willie. I think the key point on this is when you think about 2025, with the sensitivities that we've given, the impacts to us could be very modest. And really, the broader thing is to stay engaged and understand what's going on in the rest of the world is going to be a 2026-plus issue if it becomes an issue. But as we've outlined on our slide deck, I actually think this is just going to reinforce the cyclicality in the cycles of commodities. As prices go lower, they tend to bring more activity in; and prices go higher, it's the other way around.

Great. Understood. Appreciate that. And then second question, I just wanted to ask how should we think about the acquisition multiples you paid for the two bolt-on deals this quarter?

Jeremy, go ahead and take that.

So, as opposed to multiples, they both hit our return thresholds or higher. Willie mentioned capital discipline. The first was a reduction in future MVCs in exchange for taking ownership of the asset from a partner, and we priced in our rates of return there. And we've done as well or better filling the pipeline after the fact, so that's the first one. The gathering transaction, once again, our goal is to earn our base return with limited synergy allocation and to compress that multiple with synergies. So, I'd say both of them fit the model of the previous 12 acquisitions.

Thank you. Our next question is going to be from the line of Jeremy Tonet with JPMorgan. Your line is open, please go ahead.

Hey good morning. This is Vrathan Reddy on for Jeremy. The materials highlighted expectations for $300 million to $400 million of annual growth CapEx. Maybe just wondering how you think about CapEx spend at this point and how much might be locked in for 2026?

Hi Vrathan, this is Chris Chandler. We left our investment capital guidance for 2025 unchanged at $400 million net to Plains. We just wrapped up the expansion project at Fort Sask that we mentioned, and we have some related NGL supply and connectivity projects that will happen later this year. On the Permian side, where the rest of our capital is largely allocated, that connection capital and gathering spend is designed to pace our producers, but we do typically schedule that work six to 12 months out. So, we're nearly into 2026 on that segment. But if we were to see a large change in activity from the producers, we could adjust our capital and would obviously do so in response to anything that happens in that area. As for 2026, we haven't and won't provide guidance yet, but we are feeling comfortable that, that capital spend will be in our long-term capital guidance range of $300 million to $400 million net to Plains.

Got it. Thank you. And then on the frac spread, for the hedging, it looks like it stepped up to 80%. And just wondering, if we could get your latest thoughts on the hedging philosophy this year and moving forward?

Jeremy?

Yes, it's consistent. We take a fundamental view; we recognize the need to maintain steady cash flow, we set targets, and we continue to execute. So we're opportunistic around hedging because of the backwardated market; we're more hits in the front end than the back end, but that's been consistent with the last several years. So I don't think anything has changed in the last several years in the strategy.

Thank you. Our next question is going to come from the line of Sunil Sibal with Seaport Global. Your line is open, please go ahead.

Hi, good morning everybody and congrats to Harry on a successful career at Plains. My first question was related to the sensitivity that was provided with regard to the Permian production. I was curious, is the underlying assumption there that the marginal barrel is moving to a particular market, i.e., pushing or so to Houston, and that's kind of a primary driver of that sensitivity? And then is that sensitivity based on your full year volumes? Or obviously, you have almost four months plus of 2025 already in. So we should think about that sensitivity on full year volumes or more like eight months of volumes?

Sunil, this is Jeremy. That guidance was for the full year. And like I said earlier, we've already grown over 100,000 barrels a day. So the view of 200,000 to 300,000 still stands for exit to exit 2024 to 2025. As to the Permian Basin, the supply push, the market is going to price where the marginal barrel goes. So we don't necessarily have assumptions upfront; the prices will dictate that. But it's a supply push market, and they have a $60 to $80 commodity; they're moving, that last $0.50 will be dictated by the consumer, not necessarily the producer.

Okay. Thanks for that. And then one clarification. So, for full year 2025, you're guiding in the NGL segment, 45,000 barrels per day of spec sales? I presume there is a fair bit of seasonality in that. So, how much of that did you achieve in Q1?

Sunil, I think that's a follow-up question for the IR team, but the seasonality, we use our 8 million barrels of storage to optimize when we sell. So, the market tells us when to sell those commodities. We produce the spec sales; condensate is sold ratably, butane and propane are the two that are sold seasonally, but that's a function of pricing and timing and maximizing value, but that's probably a better follow-up question for the IR team.

And Sunil, this is Willie. You'll remember the typical saddle that we have with colder months, obviously, more propane is typically sold. But again, our IR team can follow up with you on that.

Thank you. Our next question will be from the line of AJ O'Donnell with TPH. Your line is open, please go ahead.

Morning everyone. I was just wondering if I could start on some of the prepared comments about the volume recovery in April and May. Just wondering if you could provide some additional details around that, where you're seeing that along your system, and maybe how that could translate into higher long-haul throughput for the remainder of the year? Thanks.

AJ, hi, this is Jeremy. Thanks for the question. Some of that recovery was due to a strong fourth quarter and then you had weather events in January and February, which kept production down. So, some of that was just production coming back online, also the deferral of completions just to get around the weather. So, this is very typical; you have the best weather period here in the spring and the fall, and so you see a lot of completion surges. As we said earlier, while volumes were a little bit down in the first quarter, that was really a function of intra-basin, which is the lowest margin part of our value chain, and that's really feeding some of the long haul. And the long haul down there was driven by downstream demand. So, to get to your question on long haul, as you get to the summer driving season or as refineries ramp back up, you're going to see a pickup in those refining markets and their demand for crude, you'll see more crude. So, it's an interrelated question.

I appreciate the detailed response. Regarding the long-term outlook, I understand that there is a lot of speculation about what might happen in the next six to twelve months given the current volatility. Could you share your updated thoughts on the total Permian long-haul utilization and when you anticipate it will reach the 80% threshold in pipelines, as mentioned in a previous investor presentation? Any insights on how you're approaching the forward market would be appreciated.

AJ, that's really a function of production. So, I think everybody has their own views of production. I think Willie said it in the beginning, which is this is probably not a pause; this is not a stop of growth. You hear different views on that, but our view is the world is going to need this crude oil for a period of time. There's a great resource. There are well-capitalized producers saying pause at the $55 to $60 range, and you've seen prices pause, which means as you see things recover on the demand side and you get more certainty around investment decisions associated with the tariffs and all that settles out, you see demand recoveries, you see the need for more crude oil recover. This is all related. So, we're not going to make long-term statements. Utilization of the pipeline is related to volumes. But our longer-term growth profile and expectation for the Permian hasn't changed. So, I don't think that's changed materially. It just might be a timing thing.

AJ, I want to emphasize that when considering the current volatility, the tariffs and OPEC are the primary drivers. A significant portion of our business plans, as well as those of others, will depend on when these issues are resolved, but the timeline for that remains uncertain. We will continue to monitor the situation.

Thank you very much.

Thank you. Our next question is going to be from the line of John Mackay with Goldman Sachs. Your line is open, please go ahead.

Hey team, thanks for the time. We've talked a lot about the upstream side, but you guys are also really tied in on the demand side as well. I'd just be curious if you have any read on kind of real-time demand signals and any sign of slowdown specifically you're seeing either on the refining side or on the export side?

So, those are two different questions. I'd say that it's very healthy, the global refining markets. And candidly, you haven't seen gasoline prices move much, but you've seen crude prices go down. So, crack spreads are very strong, and we're seeing all the refineries come out of turnarounds and run very strong. So, I'd say that's part of the reason for lower volumes in the first quarter; was driven by lower movements to refineries, and that's all picking up. So that part of the business is very healthy. On the export side, that changes month-to-month and even within one-week periods within given months. You've seen some slowdown on movements internationally, but the barrels have to move so they get priced to move. Like I said, the Permian is a $60 to $80 commodity, and that's going to push to the water and it's in the price to be sold. So I'd say we're seeing healthy margins globally for refining. That's the thing to pay attention to on a forward basis; that demand appears to be healthy.

I appreciate that. Thanks. And maybe just going back to, I think it was Gabe's question, and really, you commented a little bit more here. But just on capital allocation, I think now at the end of the quarter, you're still at the bottom end of the leverage range. Just curious how you guys are thinking about managing within that range given the potential for the backdrop on the macro side to get a little softer. Is that changing your view at all on where you want to be specifically?

John, I'll start and Al can certainly add. We've been very clear about our capital allocation plan. One, we're committed to returning cash to the unitholders. We have our targeted increase to a coverage limit we've announced years ago, and we're going to execute on that. We are also very optimistic and continue to work on bolt-ons, and we think that opportunity set is out there, and that is really the primary focus on the highest return options for cash. So, those two will drive it. Our leverage is at the lower end. If there were some transactions that made sense, we've always said that we would allow the leverage to go up with the understanding that it won't stay up. So, we're using that leverage range really to our benefit as we think about what we might be able to do in a capital-disciplined way. Al, anything to add?

Yes. The only thing I would add is it is a range, the leverage range. We don't have the stated desire to be at the bottom end or below on a sustained basis. So we do look at the ability to use some of that capacity for strategic quality investments as we go ahead. We just recently, in the last year, got BBB rated at all three agencies. We do not view and have no interest in putting leverage at a point that would jeopardize any of those ratings.

Thank you. Our next question is going to be from the line of Theresa Chen with Barclays. Your line is open, please go ahead.

Morning. I wanted to go back to the comments about M&A opportunities and the volatile landscape effectively creating more opportunities within this part of your capital allocation strategy. Are you seeing more sellers come to market at this juncture? Or do you expect this to happen as the year unfolds, depending on where pricing goes? And if there are more sellers coming to market, would you expect a more rapid pace of acquisitions, just given the state of your leverage and your balance sheet and you might only have a short window to execute? How do you view that?

Hey Theresa, it's Willie. I think it's a pretty broad range of opportunities. If you look at the list of things that we've done, I would argue that some of those transactions were done because of where perhaps a refiner was in the cycle and wanting to monetize. We've had similar discussions with upstream folks on where they want to deploy capital and how do they monetize. So this is truly a back and forth with our partners on an everyday basis on how do you win and how do we get to something. The thing I would point out is, I think you understand our system well, because of the network that we have and the relationships we have with many of these partners, we can create value in many different ways. So, lots of times, it's not just simply a bid or ask on the asset; it's also a bid or ask on the asset, but we have more opportunities to create value that create win-win situations. So, I know it's a little bit general, but hopefully gives you the dynamics of all the different things that we look at.

Thank you. I'm showing no further questions at this time. I would like to hand the conference back over to Willie Chiang for closing remarks.

Thanks, Michelle. Well, thanks, everyone, for dialing in. Strong start to the quarter. We look forward to seeing you on the road and then giving you more updates. Have a great day.

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