Good day, and thank you for standing by. Welcome to the PAA and PAGP Fourth Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, we'll open up for questions. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's call is being recorded. I would now like to hand it over to your speaker, Blake Fernandez, Vice President of Investor Please go ahead.

Thank you, Victor. Good morning, and welcome to Plains All-American fourth 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 Chang, Chairman and CEO and President, and Al Swanson, Executive Vice President and CFO, along with other members of the management team. With that, I'll turn the

call over to Willie. Thank you, Blake. Good morning, everyone, and thank you for joining us. Earlier this morning, we reported fourth quarter and full-year adjusted EBITDA attributable to planes of $738 million and $2.833 billion, respectively. 2025 was a pivotal year for planes. The market environment presented multiple challenges, including geopolitical unrest, actions from OPEC to increase oil supply, and uncertainty on the economic impact from tariffs. As highlighted on slide four, despite these transactions or distractions, we remain focused on transitioning to a pure-play crude company, which also serves as a catalyst to streamline our operations and better position planes for the future. This transition is accelerated through the sale of our NGL business, along with the recent acquisition of the EPIC pipeline now renamed Cactus 3. These transactions enhance the quality and the durability of our cash flow stream, while improving distributable cash flow and positioning us well for future market cycles. 2026 will be a year of execution and self-help with a focus on three initiatives. First, we remain on schedule to close the NGL divestiture near the end of the first quarter, pending Canadian Competition Bureau approval. Second, we're integrating the recently acquired Cactus III pipeline and expect to drive synergies related to that system to improve EBITDA. And third, we're streamlining the organization with a focus on efficiency and over the past several months we have advanced our streamlining initiatives and are targeting 100 million of identified annual savings through 2027 with approximately 50% expected to be realized in 2026. The key drivers of these efficiencies are outlined on slide 5 and including reducing GNA and OpEx to reflect a more simplified business, consolidating operations, and exiting or optimizing lower margin businesses. One example that illustrates our focus on higher margin businesses is the sale of our mid-continents lease marketing business in the fourth quarter of 2025 for total consideration of approximately $50 million with minimal impact to EBITDA. Working capital needs associated with line fill, it simplifies operations with transaction is an opportunity that we have executed on to streamline our business, improve margins, and Dumas. In January, we acquired the Wild Horse Terminal in Cushing, Oklahoma. This asset adds approximately... Looking to 2026, and as highlighted on slide 6, we are providing adjusted EBITDA guidance of 2.75 net-to-plains at the midpoint, plus or minus 75 million, with an oil segment EBITDA midpoint of 2.64 billion net-to-plains, which implies a 13% growth year-over-year in the crude segment. We expect $100 million of EBITDA from the NGL segment, assuming the divestiture closes at the end of the first quarter, and $10 million of other income. We forecast Permian crude production to be relatively flat year-over-year in 2026, with overall basin volumes remaining about $6.6 million at the end of the year, similar to end of 2025 levels. That said, We expect growth to resume in 2027, underpinned by a more constructive oil market fundamentals driven by ongoing global energy demand growth and diminishing OPEC spare. Regarding capital allocation, we recently announced a 10% increase in the quarterly distribution payable on February 13th for both PAA and PAGP. On an annualized basis, the distribution represents a $0.15 per unit increase from the November level, bringing the annual distribution to $1.67 per unit, representing an 8.5% yield based on the recent equity price for PAA. With the simplification and streamlining of our business, stable cash flow contributions from the Cactus III acquisition, and reduced commodity exposure following the NGL sale, we are modestly reducing our distribution coverage ratio threshold from 160% to 150%. This reflects improved visibility for our business, better aligns us with peers, and it paves the way for future distribution growth while still maintaining a prudent level of coverage. Our targeted annualized distribution growth remains $0.15 per unit, and the lower distribution coverage gives us more confidence in our ability to deliver increasing returns to our unit holders. Al will cover specific CapEx guidance for the year, but we expect a meaningful reduction in growth spending versus 2025 levels, and maintenance capital will naturally decrease following the end. We remain committed to our efficient growth strategy, generating significant free cash flow, optimizing our asset base, maintaining a flexible balance sheet, and returning cash to unit holders via our disciplined capital allocation framework. With that, I'll turn the...

Seven and eight contained adjusted EBITDA blocks that provide additional details. On our fourth quarter, we reported crude oil segment adjusted EBITDA of $611 million, which includes two months of contribution from the Cactus III acquisition, partially offset by a full quarter impact of recontracting. Moving to the NGL segment, we reported an adjusted EBITDA of $122 million, reflecting a seasonal uptick that was moderated somewhat by warm weather impacts on sales volumes and relatively weak cracks. A summary of 2026 guidance and key assumptions are on slide nine. We remain focused on making disciplined capital investments and expect to invest approximately $350 million of growth capital and approximately $165 million of maintenance capital net to PAA in 2026. Key drivers for EBITDA year-over-year include full-year contributions from acquisitions, primarily Cactus III, efficiency and optimization gains, partially offsetting the impact of the NGL sale, and recontracting as provided on slide 10. Importantly, I would note that while headline EBITDA will decline slightly from the divestiture, distributable cash flow is expected to increase approximately 1% driven by lower corporate taxes and maintenance capital. As illustrated on slide 11, we remain committed to generating significant free cash flow and returning capital to unit holders while maintaining financial flexibility. For 2026, we expect to generate approximately $1.8 billion of adjusted free cash flow, excluding changes in assets and liabilities and excluding sales proceeds from the NGL divestiture. With regard to the potential special distribution previously communicated we expect the cactus 3 acquisition to mitigate a significant portion of the expected tax liability to unit holders resulting from the NGL sale from this perspective we now expect a special distribution of 15 cents per unit or less after closing and pending board approval regarding our balance sheet in November we issued 750 million dollars of senior unsecured notes consisting of 300 million dollars due in 2031 at a rate of 4.7 percent and 450 million dollars in 2036 at a rate of 5.6 percent proceeds were used to partially fund the epic acquisition additionally in the fourth quarter we paid off the 1.1 billion dollar epic term loan assumed as part of the epic acquisition by issuing a 1.1 billion senior unsecured term loan at PAA. As a reminder, since we invested $2.9 billion to acquire Cactus III, the majority of the proceeds from the NGL sale will be used to reduce debt. Post-closing, we expect our leverage ratio to trend toward the middle of our established target range of 3.25 to 3.75 times. With that, I'll turn the call back to Willie.

Thanks, Al. 2025 is a transformational year for planes, and we're taking steps to further strengthen our company for the future. Despite a complex macro backdrop, we proactively executed several major transactions and implemented efficiency initiatives to position planes as the premier North American peer plan. 2026 will be a year of execution and self-help as we focus on closing the NGL sale, advancing our efficiency initiatives, and driving synergies on the Cactus III sessions will help position planes more competitively for the future. I also want to take this moment to express thanks to our planes team, whose dedication and profession achieved our best-ever safety performance as measured by our safety rate as well as the lowest severity of injuries.

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. Victor, we're ready to open up the call, please.

Thank you. And to ask a question, you need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We can pop out the Q&A roster. One moment for our first question. Our first question will come from the line of Manav Gupta from UBS. Your line is open.

Good morning, guys. I actually wanted to focus a little bit more on the Cactus Pipeline and all the Synergy benefits you're talking. And also, I know this is not the right macro, but eventually the macro will turn, and I'm trying to understand what's your ability to expand Cactus 3 without actually putting more pipe in the ground, if you could talk about some of those factors.

Manav, good morning. First on the Synergy's question, the $50 million of Synergy's we disclosed, We believe we're already on run rate for that now. Roughly half of that was associated with G&A and OpEx reductions, as well as removing things like insurance and other things that the pipeline had to keep because it was a private equity-backed entity. Those were gone, so half the synergies were achieved in the fourth quarter as we shed those costs. The other 25% are associated with filling the pipeline with supply that we have, doing shorter-term deals just to fill that available capacity, associated with quality management. Those we're ramping up now, so we would imagine during the first quarter we'll be substantially there on the run rate. Question on the ability to expand the pipeline. Our team, as we recontract the base pipeline, in parallel, Chris's team is taking a look at all the capital upstream connectivity, our downstream connectivity, and then for incremental expansions of the pipeline that don't require new pipe and that do require new pipe. So we're looking at the most capital efficient ways to do that. We should finish that during the first half of this year. And in parallel, like I said, we're recontracting for term the rest of the pipeline, and then we'll be in a position to discuss expansion, stabilize the base pipeline, and then let's look at capital efficient expansions from And they're in increments that make sense.

Manav, this is Willie. I think one key point that Jeremy highlighted is it's not a binary expansion.

Perfect. My very quick follow-up is can you also talk a little bit about the, you know, $100 million in cost savings through 2027 efficiencies and other initiatives that you are undertaking at the franchise level?

Good morning, Manav. This is Chris Chandler. So the sale of our NGO business in Canada really creates a unique opportunity for us to rethink how our company is structured and organized. So that business, as you might expect, carried a fair amount of operational and commercial complexity that simply won't exist once the assets are sold. So we're taking a fresh look from top to bottom at how we're organized, where we're located, a fresh look at some of the maybe non-core businesses that might be better in somebody else's hands or for example outsource to third parties that could do it more efficiently so it's it's really an across-the-board look that you know you don't get the opportunity to do this very often as far as the the capture rate it's a hundred million dollars run rate by the end of 2027 so we expect to achieve 50 million of that in 2026 and another 50 million in 2020 thank you so

much for taking my questions. I'll turn it over. Thanks, Benav. Thank you. One moment for our next

question. Our next question comes from the line of Brandon Bingham from Scotiabank. Your line is

open. Hey, good morning. Thanks for taking the questions. Maybe first, just looking at the Permian Basin outlook and kind of some of the commentary you just went through, just trying to harmonize it with some of the larger producer commentary from recent earnings calls. How is the sentiment among your producer customers and maybe what are some of the current discussions like assuming that 60 65 dollar WTI scenario in your guide good morning Brandon this is Jeremy

first I would say that 60 to 60 it's very volatile times more efficient so so that continues to be again and Brandon this is really a couple a couple other things to point out it's an exercise and

constraint removal so one one observation is gas has been tight and there's a number of projects that are there to alleviate that, and when you alleviate the gas constraint, actually the break-evens for the producers improve, which allows them to be able to be more durable going forward, and I think just to reinforce your point, you know, we've had some consolidation in the upstream section with a couple of the producers recently announced, and for us, we like that because it bolsters the producer environment to develop the basins in a more thoughtful way and I'm actually very very encouraged by some of the technology improvements that some of the majors are focused on on resource recovery so when you factor all that in we're very very the ability for the Permian to be a key part of the incremental supply for the world for quite the comeback as

fundamentals improve very helpful thank you and then maybe just looking at the capital allocation priorities would be curious to hear if maybe there's a shift in any of them versus what they have been, and specifically thinking around the payout ratio, is that 150 percent level more so to just continue the bolt-on strategy or other priorities? Or is there room to maybe further reduce it and maintain that 15 cent per unit distribution growth cadence a little bit longer?

Brandon, this is Al. Our view on capital allocation, I noted in the prepared comments, there's two ways to look at it. We got the net proceeds coming from the divestiture. We really redeployed that already into Cactus III. So the proceeds there are going to pay down debt. When you look ahead post that, it's all the same viewpoints that we had before. Our primary way of returning cash to shareholders is going to be through distribution growth. That's part of the 160 to 150. We're comfortable with the 150 level. we think it's actually consistent with a large number of our peers and so we'll be looking to continue looking at bolt-ons where they make economic sense distributing cash through distribution growth secondly we do have some preferred securities as well as common unit repurchases those will be more on

an opportunistic basis. Very helpful. Thank you. Thanks, Brandon. One moment for our next question. Our next question comes from the line of Michael Blum from Wells Fargo. Your line is open.

Thanks. Good morning, everyone. Maybe you could stay on the distribution coverage conversation. I really just wanted to get a little more of your thought process on how you landed at 1.5 and, you know, not 1.4, 1.3, just exactly, is there any kind of formulaic way we should, thinking about this? You know, you mentioned some of your peers, but, you know, I could think of one peer off the top of my head that, you know, says 1.3 is the right coverage. So, just trying to get a little more insight into your thinking on that.

Willie, this is Willie, Michael. You know, when you think about how we came up with the 160 right that was in November of 22 and it was intended to be a coverage threshold that was conservative reflecting you know our focus on the balance sheet I wouldn't try to read too much into the Delta other than at 150 it's still a conservative approach to distribution and for us it sets a nice balance for us as we look forward on the ability that for multi-year distribution growth so I would I would look at it as kind of a reset to the a modest reset consistent with our peers as we go forward we think we have a much more durable cash flow stream and it's really set there to allow us to to feel good about our multi-year distribution got it thanks for that and then just

wanted to ask on the growth capex of 350 million uh i guess twofold one can you give us any details about any discrete projects that that make that up or just some color around or what's what's in that number and then uh is this a good way to think about a run rate going forward now that you're really focused in the crude markets thanks good morning michael it's chris chandler so uh yes

our guide for 2026 is 350 million that brings us into our more typical 300 to 400 million dollar range which we do think is a good number going forward absent any large investments which we would call out separately when I think about how we got to 350 and comparing it to prior years we of course finished up the NGL fractionator expansion last year in Canada we finished up a number of Permian crude oil infrastructure projects and we finished a project to unload you went to wax crude in the mid-continent. So those obviously all brought the number down on a year-on-year basis. As far as how we build up into the 350, we have a healthy permeant connection program that's ongoing. In 2025, we connected more wells than we connected in 2024, and 2026 looks to be on a similar pace so far. We're also, of course, doing some modest investment to integrate the Cactus III pipeline to capture synergies, as Jerry mentioned, with additional connectivity and opportunities for quality optimization and cross-connecting between our other Cactus pipes for energy efficiency. And then we see some good opportunities to potentially invest capital into our Canadian crude oil business. We're pursuing a number of potential contracts that would underwrite expansions there and have assumed some of That moves forward in 2026 as part of our capital spending.

Thank you. One moment for our next question. Our next question will come from the line of Jeremy Tonette from JPMorgan Securities. Your line is open.

Good morning, Jeremy. Thanks for the caller today. I just wanted to take a step back here. and there's been some geopolitical developments recently, particularly what's been happening in Venezuela. And it seems like there could be a domino effect in a lot of different directions of what happens there. So I was just wondering if you might be able to share any thoughts on how things could unfold, how could it impact planes, flows on assets, utilization, or even repurposing of assets.

Hey, Jeremy. Jeremy Goble, how are you? The idea around Venezuela, think of the initial response of 50 million barrels sold, you restructure some of the slates and get consistent with what maybe Pascagoula or the St. James refiners or the Houston refiners had run, that immediate impact was widening of Canadian differentials in the Gulf Coast, the other heavy sour differentials, the MidCon and Canada. That creates opportunities, quality optimism. Going forward, if you look out a few years and maybe add 200,000 to 300,000 barrels a day, that might change some buying habits that shouldn't be enough with those materially. They'll have to price to move. So that would probably be a little bit wider Canadian differentials than otherwise would have been. It would take, if you added a million barrels a day, that does now may push Canadian barrels to the west. So I think it's first you need stability in the government. You need substantial reinvestment. Near term, I think it creates.

Got it. That's very helpful there. And one other high-level question, if I could. Points has been active in, you know, industry consolidation, both on M&A, what have you, over time. And I was just wondering, from your perspective, Willie, where do you think, what inning are we in right now for consolidation in the crude oil infrastructure industry, both on larger consolidation, what have you?

Well, I would say it's not a perfectly smooth trajectory if you think about consolidation. And specifically for us, we've made a couple of large transactions. Our focus right now is really to execute on those. We look at all kinds of opportunities that are out there. So you can be assured that as we look at things, we'll stay capital disciplined on being able to acquire things. But I do think there will be more opportunities that are out there. And frankly, to your earlier question, when you think about the macro and you look at the North American infrastructure, you asked about Venezuela. Everyone has a different outlook and view of what might happen there. I personally think it's going to be very challenged to get a significant amount of growth out of Venezuela, which leads us to a more constructive crude oil environment going forward. And when you think about the infrastructure that we have in ground and the ability to repurpose, if it makes sense, there's a lot of neat opportunities there. And I mentioned this on one of the last calls. If you think about the basins that you want to be involved in, the Permian Basin, obviously is key, close to markets, growth, low break-evens, but you also have Western Canada, and everyone's aware of the desire for them to go to the West Coast, and, you know, we stay very involved in potential of bringing more barrels down to the U.S., so there's a lot of neat opportunities, and you can expect us to stay on track at looking at those with financial

discipline. Got it. That's helpful. Thank you. Thanks, Jeremy. Thank you. One moment for our question next question will come from the line of Keith Stanley from Wolf

Research your line is open hi good morning wanted to ask on coverage so the release specifically says that the change in threshold to 150% provides a multi-year runway runway for 15 cent increases so I want to confirm should we interpret that as the plan would be 15 cent increases for at least two more years. And if that's right, it implies a fair amount of growth since you'd have to stay above that 150%. So can you just talk to some of the growth drivers you see in 27 and 28 that would

support that? Yeah, Keith, this is Willie. You're very astute as you did your calculations. The message we wanted to send is we have the ability to continue to grow beyond 2026. So if you think of our EBITDA this year, we've got 100 million of NGL contribution. And as you think about 27 plus, we've got self-help that chews up easily half of that. Our comments earlier about additional growth in the Permian gives us a confidence in that. And we know we're going to be able to extract additional efficient growth synergies out of that, out of our asset base. So we are telegraphing that we think we can grow beyond. Okay, great. And then one other coverage

one so you've talked to the rationale for 150 percent of DCF when you assess where you want to go from a coverage perspective do you look at it on a free cash flow basis too because that you have pretty steady 300 400 million a year of investment capital just how do you look at it I guess on a free cash

flow perspective as well Keith this is Al we've really set it based on DCF and the view that the DCF coverage of, say, 160 or now 150 would allow us to fund what we would call routine organic capital, the $300 to $400 million kind of range that we think is more of a normalized level, plus a small bit for bolt-ons. So we think of it more of the coverage funding routine investments. Clearly, if we see investments that are outside of what is routine or larger, we'll use the balance sheet for that. So it's not a precision on free cash flow. It's really, or a percentage of free cash flow, but we are allowing for that kind of self-funding of what we think is a routine kind of profile of investment capital.

Thank you.

Thanks, Keith.

Thank you. One moment for our next question. Next question comes from the line of John McKay from Goldman Sachs. The line is open.

Thank you for the time. I want to touch on the long-haul per-mean volume guidance for a second. You know, it's a little – maybe if you can just talk a little bit about the year-over-year bridge. I think it's a little stronger than what we were looking for, but maybe the overall margin is intact. So a little bit of that volume versus margin mix and bridging us to that pretty high 26 That's really helpful, Jeremy. I appreciate that. Second one, maybe just looking a little more near term, what did you guys see in terms of storm impacts on volumes across the board? I think that the visibility on the gas side has been clear, but maybe just walk us through kind of what you saw the last week or two and kind of where the recovery stands right

Thanks, John. John, to start with the recovery, that's already happened. So it was roughly a 7- to 10-day period when you had back-to-back. That impacted the gas infrastructure, made it difficult. And once gas infrastructures impacted, it shut down the crude. So we saw almost like...

Super interesting. I appreciate the color. Thank you, guys.

And that's all been considered in our guidance.

Thank you. Our next question will come offline. Sunil Sibal from Super Global. Your line is open.

Yeah, hi. Good morning. Thanks for the time. Most of my questions have been hit, but just a couple of clarifications. So in regards to your loading of distribution coverage to 150%, so obviously you have more contracted cash flows coming in through Cactus. Anything else in terms of how you manage your other assets in terms of contracting that we should be thinking about there?

Sunil, this is Al. No, I mean, we are comfortable with the 150. we think the crude segment is a stable cash flow stream. Clearly, the EPIC pipeline is highly contracted, but as we look at it, we think the 150 coverage is actually still remains a conservative coverage level relative to our company, and we also think it funds what I described as a routine kind of investment capital going forward.

okay thanks for that and then I think in your prepared remarks you mentioned about some storage acquisition the wild horse horse terminal could you walk through that a little bit again I think you said four million barrels of storage but what's the approximate cost for that

Sudeel hi this is Jeremy good morning here's what I would say so that's four to five million barrels for the Jason tar existing facility our net cost is anticipated to be ten million it'll may take us some time to integrate the facility it's got an existing operations today we feel like we have sufficient demand our existing cushing facility is fully contracted to downstream partners and we would just think of this as an addition to that business and with a low cost okay thanks for that thank you one moment for our

next question the next question comes from line of AJ O'Donnell PPH line is

open hey thanks for the time everyone um just one question for me i'm not sure where the development of venezuela kind of fit on the timeline of your budget but just curious as you sit here today and think about where dips are and how quality dips have moved just curious how you think about the market-based opportunities trending above or below kind of that 50 million Mark that you outlined in your deck

AJ good morning What I would say is the current market reflects what our budget is So those happen towards the end of last year giving us the opportunity to lock it significantly be risked the moved out So things move all the time But when you have a movement like this it gives you the opportunity to lock some things in so I'd say it

Good, thanks for the color Thank you one moment for our next question our next question from the line And Jeremy Tonit from J.P. Morgan Securities. Your line is open.

Thank you for squeezing me back in. Just a couple quick ones, if I could add. We talked a good amount about the 60% of the business at the Permian, but just wondered if you could provide maybe a little bit more color on the other 40% of the business and what trends you're seeing there. And I get that there's cross-currents or it's influenced by, you know, cost-cut savings you're seeing there, and that will have some impacts. But just, you know, how do you think about volumes and EBITDA for that other 40 percent of the business kind of trending over time?

Jeremy, good morning. What I would say is let's start from the north. Excited about Canada, as Chris mentioned, opportunities around our rainbow system to expand our Rainsland system, seeing more activity. The rest of the business is largely flat in Canada. So, if you take our Rockies position, everything north of Cushing and west of Cushing, that's relatively stable and contracted, so flattish would be the view of that position. Cushing throughput continues at all-time highs year over year for us. So, we think that those assets in Cushing and the refinery feed assets, consistent with the refiner's performance, that should perform well this year. The South Texas is really somewhat of an extension of the Permian Basin business. It's a wellhead gathering business with trucking to support it. And so that step down from the Cactus contract did impact that business as well. But as far as volumes and opportunity sets in the system, we're excited about what we see in South Texas. Now, east of Cushing, the Cap Line system and Liberty in Mississippi, Those are assets we're looking to fill longer-term and working on some longer-term contracting. And St. James continues to provide exciting things across that platform. It's not as volatile.

Got it. That's helpful there. Thanks. And, Jen, just one last one, if I could. As it relates to the sensitivities for the 100,000 barrels per day change in total Permian production, having a 10 to 15 million impact on the business, just wondering if there's any more color you could provide there, how that sensitivity might change, if volumes grow over time, Is it linear, or could there be an inflection, realizing there's an interplay with differentials there? But just any other color, I guess, on how that could fall out.

Jeremy, here's what I'd say. I think the business is very large, right? So when we talk 100,000 barrels a day out of a basin that's over 6 million barrels a day, the impact of the gathering system is going to be relatively modest. So that's 10 to 15 million. The integrated benefit may grow over time. I think that's more of the impact of the price to go to Midland and what could change it might be on the margins and differentials around WTL and WTI but I think just because of the size of that business it's probably going to stay in a fairly tight band the impact might be to the long-haul margin since we've been reset to what is the new market our expectations would be those would widen out over time so you might got it that's helpful all you put there thanks

We'll see you next time, Jeremy.

Thank you. I'm not sure any questions in the queue right now. I will now turn it back over to management for closing remarks.

Thanks, Victor, and thanks to all of you for dialing in. We look forward to visiting with you on the road, and I hope you have a safe weekend.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.