Good day, and welcome to the PAA and PAGP First Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 11 on your touchstone telephone. Please note this call is being recorded. I would like to turn the call over to Blake Fernandez, Vice President of Investor Relations. Please go ahead.

Thank you, Michelle. Good morning, and welcome to Plains All-American First Quarter 2026 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 two. An overview of today's call is provided on slide three. 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, CEO, and President, and Al Swanson, Executive Vice President and CFO, along with other members of our management team. With that, I'll turn the call over to Willie.

Thank you, Blake. Good morning, everyone, and thank you for joining us. This morning, we reported first quarter adjusted EBITDA tripled to planes of $730 million. Al will cover the details on our results. Let me start with the macro environment, which has changed significantly since our last call. Recent geopolitical events have reiterated the importance of reliable, secure, and responsive closure of the strait has significantly disrupted global shipping channels and Middle East supply, contributing to stronger commodity prices. In response, excess floating storage and strategic petroleum reserves are being released globally. While this helps balance the market deficit on a short-term basis, we are seeing a more constructive oil market developing on a longer-term basis. Expect this destocking environment to continue over the next number of months and ultimately drive a restocking phenomenon longer term. Longer term, as countries replenish depleted post-war, we would not be surprised to see an additional layer of demand into the future, which should support prices on the supply On my side, OPEC production capacity post-war remains uncertain. It will be tighter based on a slower recovery of shut-in production and infrastructure damage during the war. We believe the conflict shifts the focus towards more geopolitically stable regions to ensure security of supply. Against this backdrop, North America, including the Permian, remain well positioned to play a critical role in infrastructure and the ground. For these reasons, we believe Plains is well positioned for both the near-term volatility and longer-term macro environment. Based on these market dynamics and the growth trajectory that we see for our business, we have increased our initial 2026 EBITDA guidance. As highlighted on slide four, we're increasing the midpoint of our full-year 2026 adjusted EBITDA guidance by $130 million. The NGL segment EBITDA is now expected to be $170 million this year, following first-quarter outperformance of $45 million. and the updated divestiture timing now in here is underpinned by three key drivers. The sale of our NGL assets, Cactus III synergy capture, and streamlining. The growth of our EBITDA is paced with the execution of these initiatives and is enhanced by capturing optimization opportunities that have been substantially secure, seeing increased producer interest in both Canada and the U.S. for additional connections to our system. The combination of all these factors will push us well into the future. Premier crude oil global markets turn to North America for long-term energy supply. We are well-positioned to cross-stream markets to drive multi-year free cash flow, optimizing our assets. We contain adjusted EBITDA walks that provide additional details on our performance.

For the first quarter, we reported crude oil segment adjusted EBITDA of $582 million, dollars, which was broadly in line with our internal estimate and includes a full quarter contribution from the Cactus III acquisition, offset by a number of one-off items, including winter weather impacts in the Permian, system maintenance, and timing of minimum volume commitments. Moving to the NGL segment, we reported adjusted EBITDA of $145 million, reflecting a stronger than expected contribution from higher straddle production and improving frack spreads in March. A summary of 2026 guidance and key assumptions are on slide seven. Growth capital remains $350 million, while maintenance capital was increased to $185 million, reflecting ownership of the NGL assets in the May. Regarding the $130 million increase in EBITDA guidance, key drivers are outlined in the waterfall on slide eight. The NGL segment increased by $70 million, driven by outperformance in the first quarter, along with the ownership of NGL assets in the May. The oil segment was increased by $60 million, driven by captured optimization opportunities for tariff escalators, increased spot tariff volumes, and increased West Coast volumes. To the extent that elevated commodity environment persists into the second half of the year, We would expect to capture incremental opportunities. For 2026 guidance, we continue to assume Permian crude oil production to be relatively flat year-over-year. While we have yet to see a meaningful shift in U.S. producer behavior, any increase in activity would likely benefit 2027 and beyond. We expect an improving back end of the crude oil curve and removal of natural gas takeaway constraints as new egress projects start up later this year to drive incremental activity throughout the year. As illustrated on slide nine, we remain committed to generating significant pre-cash flow and returning capital to unit holders while maintaining financial flexibility. For 2026, we expect to generate approximately $1.85 billion of adjusted pre-cash flow, excluding changes in assets and liabilities and excluding sales proceeds from the NGL divestiture. Our pro forma leverage at the end of the first quarter was 4.1 times, reflecting the Cactus 3 acquisition. First quarter leverage pro forma for the NGL sale would decrease to approximately 3.5 times and we would expect leverage to migrate toward the low end of our target range of 3.25 to 3.75 times by the end of the year. We expect net proceeds from the NGL sale to be approximately $3.3 billion, which is approximately $100 million higher than our prior estimate. Our acquisition of Cactus III last year has mitigated the tax liability to unit holders resulting from the NGL divestiture. As a result, we no longer expect to pay a special distribution following the closing of the NGL sale. Before handing it back to Willie, I would note that both current and deferred taxes are elevated on the statement of operations this quarter because of the restructuring activities associated with the NGL sale. There was no cash tax impact in the quarter as payment of the related taxes will be made in conjunction with closing or in future periods. With that, I will turn the call back to Willie.

Thanks, Al. In the midst of volatile energy markets, we remain steadfast and focused on executing our three initiatives for 2026 – closing the NGL sale, driving synergies on Cactus 3, and advancing our streamlining initiatives. Our efficient growth strategy is positioned as well to execute through a range of market environments, generating durable cash flow and creating long-term value. Importantly, the improving oil macro environment starting to present additional organic investment opportunities with strong returns. We continue to evaluate both organic and inorganic opportunities in a disciplined manner. Capital investments help underpin long-term EBITDA growth, but they must meet our return thresholds and provide visibility into our transition to a peer-play crude mystery company, coupled with the acquisition of Cactus III, is proving timely as tensions in the Middle East position North America as a key source of global energy supply. Before I turn the call over to Blake, I'd like to make a brief comment about our pending transaction with KIERA. In terms of timing, as reported by both KIERA and PLAINS, while it's unfortunate that the Competition Bureau has chosen to challenge the transaction, their lawsuit does not prevent the parties from closing the transaction, which both PLAINS and KIERA. So I realize you may have some additional questions.

As we enter the Q&A session, please limit yourself to two questions. This will allow us to address as many questions as possible from participants in our available time this morning. With that, Michelle, we're ready for questions.

Thank you. As a reminder, to ask a question, please press star 11. If your question has been answered and you'd like to remove yourself in the queue, please press star 11 again. Our first question comes from Brandon Bingham with Scotiabank. Your line is open.

Thanks. Good morning, everybody. I just wanted to maybe ask on the new guide, if I look at your sensitivity and the new crude price expectations, it would imply that, at least on price movements alone, the crude contribution should probably be higher than what is currently shown. Could you just walk us through what's baked into the new guide and

maybe the embedded outlook in there uh sure brandon this is al um uh yeah our original guidance for the year assumed a 60 and 65 environment for uh 2026 so kind of a 62 we came into the year highly hedged at roughly those levels um the 85 environment that we're talking about for the future is roughly the strip from June through December when we looked at it. So there would be some benefit based on crude prices on our PLA, but the fact that we had hedged quite a bit before entering the year, that sensitivity we give is just a raw sensitivity. In order to make it more meaningful we would have had to have disclosed to you the the hedge position at the beginning of the year which we haven't historically done um so what i would say is that the first quarter performance uh and the nine months of our guide is very minimally impacted by actual pla

pricing okay thank you very yes very helpful thank you um and then maybe just wanted to ask about you know in light of some of the commentary and your prepared remarks about a more constructive longer-term market and just the whole macro environment as it stands today how are you guys thinking about the potential for the epic expansion at this point Brandon good morning this

is Jeremy we're excited about the opportunities around our entire log with existing customers and new customers looking for secure supply from the United States. So that results in some spot activity, but longer-term expectations. So that would apply to recontracting existing pipeline capacity. We're looking at all of the above and hope to have them.

Okay, great.

Thank you. Our next question comes from Gabriel Marine with Mizuho. Your line is open.

Hey, good morning, everyone. Maybe I'll just ask the Permian macro question, Willie, in terms of sort of your best outlook? I think, you know, previous years you talked about 200,000-ish barrels a day, year-over-year growth. Best venture at this point, I realize there's a lot of things in play and things are changing quickly, but do you think that goes significantly higher from here, 400,000, 500,000, and 27? I'm just curious what your latest thoughts are there.

Yeah, Gabe, this is Willie. Jeremy may have some additional comments, but I'll give you my thoughts. The U.S. producers have remained very disciplined as far as capital allocation, and they're looking really at the back end of the curve to see where it goes. You know, WTI is roughly $70, and our view is when you start getting into the $75 and above, increased activity happens. There's also some other things that go on short-term operating bias that's limiting production or constraining it a bit. We've got some natural gas. The Permian has some natural gas takeaway constraints. There are new lines that are being built and being commissioned as early as later this year. So the thought being that alleviates itself. Our assumption for the Permian this year, and if there is some upside, obviously we benefit from it, but our view going forward is not giving a formal guide, but we would expect growth going forward and probably some momentum of volumes behind that's going to increase production here, maybe with a little bit of a flush later. So I think it really depends on the back of the curve, but the systems are ready.

Thanks, Willie. And then maybe if I can ask kind of on the sustainability of some of the marketing opportunities you're currently seeing, can you just talk about, I guess, some of the spreads that you're seeing, and also on the value of dock space, the extent you're debating internally maybe terming some of those out at higher prices, and then also the steepness of the curve and backwardation, you know, how that's playing with your storage. Is that helpful? Is that a hindrance? I'm just curious your thoughts on that.

Gabe, without getting into specific strategies, it's hard. This is a very volatile time. We're not giving a formal guide, But if you look at what's accumulating all of this to go, and as you add more, that puts more pressure on potentially long-haul spreads and the ability to term up contracts at grand from new customers.

And, Gabe, this is Willie again. If you look at our numbers, long-haul has increased, and the margins on that has also improved. So I think we're moving to a more structurally full-pipe situation as we go forward, which should be constructive for us.

appreciate it thanks guys thank you our next question comes from Manav Gupta

with UBS your line is open good morning I just wanted to focus a little bit on the weather impact I think it is about 49 million quarter over quarter I'm just trying to understand you know it says timing of minimum volume commitments is there a possibility some of this can be reversed in 2q some of what you lost in in the current quarter comes back into the second quarter, if you could talk a little bit about that.

Yes, Manav, those are two different things. But first, with regard to weather, weather is just production shut in for a period.

And if you could also talk about the very strong results from the NGL segment in the first quarter versus the last quarter, some of the drivers of what helped you deliver a much stronger earnings on that segment quarter over quarter. Thank you.

Sure, Manav. This is Jeremy again. Higher border flows than expected. You had very full storage in Canada and continued production, which required the volumes to be exported, and those were exported through our empress assets, so higher border flows leads to more straddle production, and that would all be unhedged.

Thank you.

Our next question comes from Michael Bloom with Wells Fargo. Your line is open.

Thanks. Good morning, everyone. My question is really on the guidance, the crude segments. I think I'll just ask it all at once. So the increase, just wanted to make sure I understood, it sounds like most of this is optimization, which you've already locked in, and then maybe the rest is PLA. So I just want to make sure I understood that. And then the second part is, if prices stay elevated for the balance of the year, Would there be upside to the guide in the crude segment, or is that already sort of faked into the numbers?

Michael, this is Willie. Great question. Our assumptions are that the numbers that are in there really are what we've captured that roll off through the year that we'll actualize on optimization efforts, and you're correct. If we have a stronger macro environment, higher prices, there definitely is upside.

Great.

You bet.

Thank you. Our next question comes from Jeremy Tonek with J.P. Morgan Securities. Your line is open.

Hi, good morning. Hi, Jeremy. Just wanted to see what you guys are seeing locally, ear to the ground there as far as producer activity and whether rigs being picked up by the independents or if larger drillers could as well and what would be needed to be seen, I guess, across this trip to gain the comfort to do that. And so just wondering how you think, you know, production could uptick here, or what do you see?

Jeremy, good morning. This is Jeremy. So since this started, you've already seen 15 rigs added back, and we would expect some to continue. But as Willie mentioned, there's a bit of a throttle right now. You can't add more natural gas to the system as if flaring's not allowed. So productive capacities there, rigs being added now would impact 2027. I think there's a bit of confusion by the market in that if you take the products market and the physical crude market, they're substantially more tighter than the financial markets would indicate, which means the back end of the curve has to come up. It's very difficult, even if you open the Strait of Hormuz tomorrow, to get everything back in order the way it was. It's going to take a while for shipping to star gets or just empty in some places. So I think there's real dislocation that will take time. And I think some of the integrators have stated it's for every day it's down. And so it's potential for months to get out of this, even if I think that's the part more assurance back in takes maybe causing some.

Got it. That's helpful there. And then, you know, just wanted to see, I guess, how you think that impacts basis over time here and, you know, what it could mean for future egress expansion.

Thanks, Jeremy. It's constructive for basis. more production is and more demand on the water so you're seeing a specific to the corpus market and and some of the on-the-water efficient docks you're seeing higher pricing and relative to even the screen and so that on a prolonged basis as there's new buyers vessels that used to be pointed at other locations that intend to come back and forth to the United States for a while so I think you're seeing that on the NGL side I think you'll see it on the LNG G side, and I think you'll see it on the crude side. More buyers and more demand is generally constructive for spreads, and so we would expect to match either our supplier or our customers with that, and hopefully... Jeremy, this is Willie. You're aware that on Cactus 3, we have

expansion capacity there, and as we've always said, we're going to pace it up. The other highlight, we have the ability to do that, to get additional volume. That is helpful. Thank you.

Thank you. Our next question comes from Jackie Kalitas with Goldman Sachs. Your line is open.

Hi, good morning. Thank you so much for the time. First, I was wondering if you could just comment on the progress of your cost reduction initiatives. Are these on track with expectations at this point? And is there any potential for upside capture here? When should we expect for planes to realize more significant efficiencies through the year yeah good morning Jackie it's Chris

Chandler I'm happy to take that we are on track to capture the efficiencies 50 million dollars by the end of 2026 and an additional 50 million dollars in 2027 we've actually already made a number of changes some unrelated to the NGL transaction some in anticipation of the NGL transactions. So we feel confident in the number. There's always upside. We're always looking for additional opportunities and we will certainly pursue any that we find. We're not prepared at this time to change the $100 million target we have through the end of 2027, but on track there

and things are going well. Great to hear. Thank you. And then I'll just one on just shifting to capital allocation, you know, with debt reduction as a near-term focus, particularly following, you know, the pending NGL sale, you know, when do we expect a shift or what would kind of allow a shift from debt paydown to a larger focus on, you know, potential buybacks or preferred paydowns?

This is Al. I'll take a shot at it. Yeah, so clearly with the proceeds from NGL, we anticipate taking that and paying down roughly a little over $3 billion of debt, which would be the term loan, the outstanding CP we have, and a $750 million note that matures later this year. Post that, we expect to be right at the midpoint of our leverage. We expect a 3.5. We expect that to migrate down, which will then come back to where we've been for the last number of years prior to the epic acquisition leverage towards the low end of our range our view would be capital allocation first and foremost focused on maintaining distribution growth funding investments whether they're organic or M&A related as well as looking at taking out perhaps should leverage remain at or below the bottom end of the range and opportunistic share repurchases so long-winded way of saying in that once we get through the NGL sale and deployment of the proceeds back to where we've been operating for the last several years.

Great. Thank you.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Willie Chang, President, CEO, and Chairman, for closing remarks.

Michelle, thanks. We appreciate everyone's support and attention, and we look forward to seeing you on the road. Stay safe. Thank you very much.

Thank you for your participation. you may now disconnect. Everyone, have a great day.