Plains All American Pipeline (PAA & PAGP) Q2 Results - Aug 5

[dan_s]

The midstream companies are the "safe bets" during this market selloff. Their pipes will remain full unless there is a MAJOR RECESSION. At today's unit price PAA's cash flow yield is approximately 7.5%. PAA is an MLP. PAGP is a C-Corp. that pays identical dividends.
My updated valuations are 20.40 for PAA and $21.00 for PAGP.
My updated forecast model for PAA has been posted to the EPG website.


Second-Quarter Results

Reported net income attributable to PAA of $250 million and net cash provided by operating activities of $653 million

Delivered Adjusted EBITDA attributable to PAA of $674 million

Generated Adjusted Free Cash Flow of $421 million (excluding changes in Assets & Liabilities; including bolt-on acquisition capital)

Successfully priced public offering of $650 million of unsecured senior notes at 5.7% due 2034

2024 Guidance Update

Raising the mid-point of guidance for full-year 2024 Adjusted EBITDA attributable to PAA by $75 million to a new range of $2.725 - $2.775 billion < This will increase my valuations of PAA and PAGP.

Reiterating full-year 2024 Adjusted Free Cash Flow guidance of $1.55 billion (excluding changes in Assets & Liabilities; including bolt-on acquisition capital)
"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. "We remain focused on maximizing long-term value for investors, through our consistent strategy of capital discipline, generating meaningful Free Cash Flow and increasing return of capital to equity holders while maintaining financial flexibility."