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2014 NAPTP Conference – Plains All American Pipeline, L.P.

Plains All American Pipeline, L.P. · May 21, 2014 · 60 slides

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Slides

  1. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 1
    2014 NAPTP Conference Greg L. Armstrong Chairman & CEO May 21, 2014
  2. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 2
    Plains All American Structure One Business - Two Ways to Invest (NYSE: PAA & PAGP) (1) General Partner General Partner Owners Public PAGP Series A Shareholders 21% Structured as a limited partnership, Investors Occidental Petroleum…
  3. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 3
    Plains All American Current Profile (NYSE: PAA & PAGP) Financial Profile(1) PAA Assets(3) Total Enterprise Value 46.1 B Pipelines (active miles) 18,150 miles PAA Equity Market Cap 20.7 B Liquids Storage 120 MMBbls PAGP et. al. Eq.…
  4. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 4
    PAAs Integrated Assets Are Located Throughout North America in Major Crude Oil Production & Liquids Rich Areas as well as Inland and Coastal Terminal & Interchange Locations PAA Handles 3.5 MMBLS/day of Crude Oil & NGLs -5-
  5. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 5
    PAAs Activities Are Conducted on Four Product Platforms Crude Oil is the Largest by Far Areas of involvement Illustrative Adj. Net Revenue reflected in Yellow Crude Oil Contribution NGL 20% Crude oil 75% Natural Gas Liquids…
  6. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 6
    PAA Conducts its Activities Through Three Segments Each Underpinned by Substantial Assets Reporting Segments(1) Adjusted Segment Profit Supply & Logistics (Margin Based -- includes fee-based equivalent + upside) 840 Trucks, 980…
  7. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 7
    PAA Has Delivered Solid Performance Throughout Volatile Markets and Fluctuating Petroleum Supply and Demand NYMEX Crude Oil Prices PAA Adjusted EBITDA : U.S. Petroleum Consumption 150.00 Actual Performance vs. Guidance(1) 21,000…
  8. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 8
    North American Crude Oil Markets Current Environment is Very Attractive for PAA
  9. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 9
    US & Canadian Production Growth Expected to Continue Majority of Increase is Light / Medium Sweet & Condensate US & Canada Expected to Continue to Lead but, variations in crude the World in Crude Oil Production Growth quality &…
  10. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 10
    Projected North American PAA is a Top Provider of Flexible Midstream Assets Crude Oil Production Growth In Substantially All Major N.A. Crude Oil Resource Plays 4Q2013 YE2017 Volume Growth Driving Increased Infrastructure…
  11. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 11
    EXAMPLE 1 -- Permian Basin: PAAs Largest Asset Footprint; An Area of Significant Strength & Flexibility Direct Connectivity to Cushing, Corpus Christi and Indirect Connectivity to Houston/Other Markets Crude Oil Assets/Activities(1)…
  12. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 12
    EXAMPLE 2 -- Eagle Ford: Flexible Footprint Provides Pipeline, Rail and Barge Access Crude Oil Assets/Activities(1) Crude Oil Production (MBbls/d)(2) Expected JV Pipeline Capacity: 470 MBbls/d 1,600 +35% Area Pipeline Miles: 440…
  13. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 13
    PAA Has a Sizable Presence in Most of the Major N.A. Crude Oil Market Hub / Demand Areas Including Rail PAA Also Has a Meaningful Presence in Key Natural Gas and Canadian NGL Market Hubs Summary of Capacity at PAA Facilities Edmonton…
  14. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 14
    PAA 2014 Expansion Capital Program Based on guidance furnished via Form 8-K on May 7, 2014 (in millions) Other Projects Permian Basin Area Projects 470 Cactus Pipeline 330 (1) Natural Gas Rail Terminal Projects 215 Storage Permian…
  15. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 15
    Solid Industry Fundamentals + Asset Base + Business Model Support Continued High Levels of Organic Capital Investment Annual Levels of Organic Investment 1,950 - 2,000 1,750 Strong Visibility for 1,620 Growth 1,600 Multi-Billion…
  16. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 16
    Long Term, Acquisitions Expected to be Additive to Organic Growth PAA Remains Active, but Disciplined Acquisitions Total: 10 Billion (2001-2013) 2.0 2006 2012 3.1B 2.3B 1.5 2007 2012 In billions Avg: 900 MM/yr 1.0 2001…
  17. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 17
    PAA Capitalization & Liquidity at 03/31/14 Capitalization (in millions) 03/31/14 12/31/13 Long-term Debt 6,818 6,715 Partners' capital 7,783 7,703 Total book capitalization 14,601 14,418 Credit Stats & Liquidity Target Long-term…
  18. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 18
    Generating Meaningful Excess Cash Flow 2.2 Billion Excess Cash Flow Reinvested Over 11 Year Period (in millions) 11-Year DCF 9.4 billion 11-Year Distribution Coverage 130%(1) Favorable Market Conditions 1,600 1,400 23% 1,200…
  19. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 19
    Consistent Execution Of PAAs Strategy Has Driven Attractive Distribution Growth & Total Returns Over Multi-Year Period Annualized Year-end Distributions(1) Target Increased in 38 of 40 quarters 10% Growth 2.75 2.50 2.40 2.25…
  20. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 20
    PAA Growth In Distributions & Unit Count Will Drive Distribution Growth at PAGP Execution of PAA plan to deliver 10% PAA distribution growth(1) in 2014 leads to 25% PAGP growth PAA Distributions Paid & Unit Count (2) Cash Received by…
  21. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 21
    PAA/PAGP Investment Considerations Strategically located, geographically diverse & operationally flexible assets Well positioned to benefit from dynamic crude markets and service high-growth liquids resource plays Proven business…
  22. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 22
    Appendix
  23. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 23
    Plains GP Holdings (NYSE: PAGP)
  24. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 24
    Summary Of The Up-C Structure IPO was structured utilizing the Up-C (Umbrella Partnership-Corporation) structure Public investors receive distributions from their Class A share ownership in PAGP (C-Corp taxation) Existing Owners…
  25. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 25
    Condensed Consolidating Balance Sheet of Plains GP Holdings (PAGP) (in millions) March 31, 2014 Consolidating (1) PAA Adjustments PAGP ASSETS Current assets 4,932 2 4,934 Property and equipment, net 11,152 21 11,173 Goodwill…
  26. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 26
    Summary of Plains GP Holdings (PAGP) Distributions from PAAs General Partner (AAP) (in millions, except per unit and per share data) Q1 2014 PAGP DISTRIBUTION SUMMARY (in millions, except per unit and per share data) (1) Q1 2014…
  27. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 27
    Indicative Tax Calculation Annualized As a result of the step-up in basis, PAGP is After-Tax Cash Flows to PAGP Investors expected to have tax amortization of Taxable Distributed Cash Flow from AAP(1) 95 approximately 205 million per…
  28. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 28
    PAGP Distributions Levered to Growth at PAA PAGP Growth 2.0x PAA Growth (at Current PAA Level) PAGP Distribution Leveraged to PAGP Distribution also Grows as PAA Underlying PAA Distribution Growth Unit Count Grows (Linear Relationship)…
  29. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 29
    Overview of PAA Segments
  30. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 30
    Overview of PAA Segment Profitability 2014(G) Adjusted EBITDA: 2.15 Billion Supply and Logistics Transportation 30% 42% Facilities 28% Margin-Based Fee-Based Revenues Fee-Based Revenues Revenues (Includes…
  31. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 31
    Principal Drivers of Segment Performance Supply and Transportation Facilities Logistics Principal Throughput volumes Leased capacity Volumes (lease Performance gathering and NGL Drivers Tariffs per barrel Lease rates & sales)…
  32. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 32
    PAA Historical Results & 2014 Guidance ( in millions) PAA Adjusted EBITDA by Segment 2,292 2,250 2,107 2,150 Baseline Supply and 1,875 893 649 Logistics Profitability 1,598 855 1,500 1,106 613 1,125 600 1,022 629 277 502 287…
  33. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 33
    Transportation Segment Outlook Transportation Segment Adjusted Segment Profit (MM) 4,500 0.80 4,000 900 0.75 742 760 3,500 0.70 502 549 595 0.61 0.65 MMBbl / Day 3,000 0.58 0.56 0.60 2,500 0.53 0.50 0.55 2,000 0.47…
  34. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 34
    Facilities Segment Outlook Facilities Segment Adjusted Segment Profit (MM) 140 600 0.55 629 120 502 0.50 100 381 0.44 MMBbl / Month 0.45 284 0.41 80 217 0.39 0.39 0.40 60 0.34 0.35 40 0.30 20 0.30 0 0.25 2009 2010…
  35. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 35
    Supply & Logistics Segment Outlook Supply & Logistics Segment Adjusted Segment Profit (MM) 1,400 2.55 2.33 2.27 2.35 1,200 893 649 2.15 1.94 855 1,000 613 1.95 MMBbl / Day 800 287 277 1.75 1.54 600 1.55 1.35 400…
  36. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 36
    Overview of Supply and Logistics Baseline(1) (Predictable) Adjusted Segment Profit Composition of Supply and Logistics Baseline PAA Adj. Segment Profit(2) Adjusted Segment Profit by Activity Supply & Transportation Logistics 15%…
  37. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 37
    PAA Expects Annual Baseline Supply and Logistics Adjusted Segment Profit of 500 - 550 Million Supply & Logistics Adjusted Segment Profit 855 893 900 613 525 600 280 300 0 Avg. 2007 - 2010 2011 2012 2013 2014 (G) Drivers…
  38. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 38
    Overview of Supply and Logistic Segment 15% Activities 65% 20% Activity Overview / Comments Crude Oil Lease Represents 65% of baseline segment profit cash flow Gathering PAA purchases crude at well-head to deliver (sell) to…
  39. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 39
    Overview of Supply and Logistic Segment 15% Activities (Continued) 65% 20% Activity Overview / Comments NGL Sales Contribution varies, but is 15% of baseline segment profit Average 200 mb/d* Includes supply-based Canadian NGL…
  40. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 40
    Overview of Crude Oil Lease Gathering
  41. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 41
    Lease Gathering is an Essential Part of the Crude Oil Value Chain Producers want: Ability to sell production at the lease at a fair price (would rather deploy capital into drilling and producing versus owning midstream assets)…
  42. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 42
    PAAs Role in the Gathering & Marketing Process Lease Gathering Role Refinery Supply Role Step 1*: Step 2: Step 3: Step 4: Step 5: PAA buys PAA transports PAA administers PAA pays tariffs PAA delivers crude oil the crude oil to the…
  43. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 43
    PAA Lease Gathering is a Fee-Equivalent Activity Essential Service Provides Durable Baseline Cash Flow in Variety of Markets -- Values Provided for Illustration Purposes Only-- PAA PAA Pipeline Production Market Terminal Area…
  44. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 44
    Gathering Business Complements Transportation & Facilities Businesses & Provides Expansion Opportunities Benefits to Ongoing Business Gathered barrels can base load PAAs pipeline systems Gathering business able to ship historical…
  45. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 45
    Additional PAA Information
  46. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 46
    Mid-Continent: Area of Historical & Continued Strength; Cushing Assets Provide Significant Connectivity and Flexibility Crude Oil Assets/Activities(1) Barrels Transported: 295 MBbls/d Storage Capacity: 22 MMBbls 1st Purchaser…
  47. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 47
    Rocky Mountains / Bakken Area: Highly Flexible Asset Base Including Pipeline & Rail Crude Oil Assets/Activities(1) Barrels Transported: 385 MBbls/d Storage Capacity: 2 MMBbls 1st Purchaser Gathered Barrels: 125 MBbls/d Expected Crude…
  48. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 48
    Canada: Strong and Growing Crude Oil & NGL Asset Base Crude Oil Assets/Activities(1) Natural Gas Liquids Barrels Transported: 390 MBbls/d Assets/Activities(1) Pipeline Miles: 3,170 NGL Pipeline Tariff Volumes: 265 MBbls/d Storage…
  49. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 49
    PAA Uses Its Crude Oil Rail Assets In Conjunction With Its North American Crude Oil Pipeline and Terminal Network To Bridge Regional Supply/Demand & Volume/Quality Imbalances Standalone rail assets have benefits (and limitations)…
  50. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 50
    Permian Basin: PAA Assets Provide Necessary Connectivity to New Export Pipelines New long-haul pipelines have been/are being constructed to relieve volumetric bottlenecks PAA assets providing 1.1 MMBbls/d of capacity to connecting…
  51. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 51
    Annual Production Increases are Projected to Decline as the Underlying Decline Rate of the Production Base Increases Lower 48 US Production Contribution per Year Through 2017 PDP + 2013P 2014P 2015P 2016P 2017P 10,000 9,000…
  52. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 52
    PAAs Fully Loaded Weighted Average Cost of Capital Illustrative Calculation Equity Cost Debt Cost Distribution Rate 3.28 10-Yr Fixed Rate Debt Cost 2.7% (current rate + 30%) PAA Credit Spread 1.25% GP Burden (adj. for 30% LP…
  53. 2014 NAPTP Conference – Plains All American Pipeline, L.P. – slide 53
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