PAA · Plains All American Pipeline, L.P.

Performance Summary

Plains All American Pipeline, L.P. (PAA) reported total revenues of $44.26 billion for FY 2025. Operating income was $1.43 billion, and net income attributable to PAA was $1.44 billion. Basic and diluted net income per common unit was $2.00. The company generated $2.94 billion in net cash from operating activities. A major strategic event was the definitive agreement to divest the Canadian NGL Business for approximately $3.75 billion USD, expected to close around the end of Q1 2026. This transaction supports the strategic objective to focus on core midstream crude oil operations.

Revenue Analysis

The company's operations are managed through two segments: Crude Oil and NGL. The Crude Oil segment is the primary revenue driver, with Segment Adjusted EBITDA of $2.34 billion, a 3% increase year-over-year. This growth was attributed to higher tariff volumes, contributions from recent acquisitions (including the Cactus III pipeline), and the benefit of tariff escalations, partially offset by fewer market-based opportunities and the impact of certain contract rates resetting to market. The NGL segment reported a Segment Adjusted EBITDA loss of $34 million, primarily due to overhead costs (e.g., information technology, insurance) that are part of continuing operations and not related to the pending sale of the Canadian NGL Business.

Margins & Profitability

Operating income was $1.43 billion on total revenues of $44.26 billion, resulting in an operating margin of approximately 3.2%. Total costs and expenses were $42.83 billion, with the largest components being purchases and related costs ($40.43B) and depreciation and amortization ($953M). Field operating costs decreased year-over-year, primarily due to the recognition in the prior year of costs associated with settlements related to the Line 901 incident.

Cash Flow & Balance Sheet

Net cash provided by operating activities was $2.94 billion. Adjusted Free Cash Flow, a non-GAAP measure, was -$875 million, reflecting significant investing activities. Cash used in investing activities was -$3.77 billion, primarily for acquisitions ($2.65B) and additions to property, equipment and other ($643M). Cash provided by financing activities was $799 million, including proceeds from the issuance of senior notes ($3.00B) and net borrowings under the commercial paper program ($577M), offset by distributions paid to unitholders ($1.29B) and repayments of senior notes ($1.00B). Total assets were $30.17 billion, with property and equipment, net of $16.86 billion. Total debt (short-term and long-term) was approximately $11.27 billion. The company reported liquidity of over $2.0 billion as of December 31, 2025.

Outlook

The company's financial strategy is focused on generating meaningful multi-year free cash flow and improving shareholder returns by increasing returns of capital to equity holders, making disciplined accretive investments, and maintaining an investment-grade credit profile. The pending sale of the Canadian NGL Business is a key part of this strategy, with proceeds expected to be used to reduce leverage. The 2026 capital plan is projected to be approximately $440 million ($350 million net to PAA's interest) for investment capital and approximately $185 million ($165 million net) for maintenance capital. The company faces risks including commodity price volatility, competition, regulatory changes, and the successful completion of the Canadian NGL Business divestiture.