Plains GP L P : 2021 1Q PAA & PAGP Earnings Conference Call Script - Q&A - Slides - Non-GAAP Reconciliation

Houston, TX | May 4, 2021

1Q 2021

Earnings Package

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Index

• Conference Call Transcript
• Conference Call Slides
• PAA / PAGP Earnings Release and Guidance
• PAA Non-GAAP Reconciliations

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PAA	PAGP 2

First-Quarter 2021 Earnings Conference Call

Tuesday, May 4, 2021

Roy Lamoreaux:

Thank you, Joseph. Good afternoon, and welcome to Plains All American's first-quarter 2021 earnings call. Today's slide presentation is posted on the Investor Relations website under the "News & Events" section at plainsallamerican.com, where audio replay will also be available following today's call. Later this evening we plan to post our "Earnings Package" to the Investor Kit section of our IR website, which will include today's transcript and other reference materials. Important disclosures regarding forward looking statements and non- GAAP financial measures are provided on slide 2 of today's presentation. A condensed consolidating balance sheet for PAGP and other reference materials are located in the appendix.

Today's call will be hosted by Willie Chiang, Chairman and CEO, and Al Swanson, Executive Vice President and CFO. Additionally, other members of our executive team are available for the Q&A portion of today's call, including Harry Pefanis, President; Chris Chandler, Executive Vice President and COO; Jeremy Goebel, Executive Vice President and CCO; and Chris Herbold, Senior Vice President and CAO.

With that, I will now turn the call over to Willie.

Willie Chiang:

Thanks, Roy and thanks to each of you for joining us this evening. We plan to keep our prepared comments brief. We continue to make solid progress on our plans - reporting first- quarter results that exceeded our implied expectations by roughly $50 million, generating strong Free Cash Flow, maintaining full-year 2021 Adjusted EBITDA guidance at plus or minus $2.15 billion, and advancing a number of key objectives. I'll note that our full-year guidance

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incorporates an estimated $25 million net benefit from winter storm Uri. Al will provide more detail on our results and outlook in his section of the call. I plan to focus my comments today on our longer-term positioning.

We are increasingly constructive in our outlook for global energy demand recovery. COVID vaccinations are progressing, key world economies are reopening, and global inventory levels have drawn down meaningfully. On the supply side, the combination of OPEC's discipline, recent increases in Permian activity levels, and our ongoing dialogue with producers reinforces our confidence in the Permian to resume growth in the back-half of 2021, and importantly, building momentum into 2022 and beyond as global supply and demand balance improves. We expect the Permian to exit 2021 at 4.4 to 4.5MMBPD, an increase of 200- 300MBPD from year-end 2020 to year-end 2021. Notwithstanding our constructive bias, we chose to maintain our 2021 Adjusted EBITDA guidance of $2.15 billion at this time due to the combination of the timing matters that Al will cover, and the fact that our constructive view of the fundamentals is weighted towards the end of the year.

For PAA, we believe 2021 represents a meaningful cash flow inflection point. As illustrated on slide 4, we've increased our Free Cash Flow estimate by $100 million and now expect to generate plus or minus $400 million after distributions and excluding asset sales. We remain confident in our ability to achieve our 2021 asset sales target of $750 million, having continued to progress formal sales processes with strong levels of interest and engagement. Including targeted asset sales our projected Free Cash Flow after Distributions grows to $1.15 billion.

Beyond 2021, maximizing Free Cash Flow will continue to be our focus. We expect to generate sizeable levels of Free Cash Flow after Distributions over a multi-year period, and any further asset sales proceeds would be additive. We plan to continue allocating Free Cash Flow after Distributions in a balanced manner, with a near-term focus on debt reduction and a larger percentage shifting over time to equity holders through a combination of share repurchases and/or distribution increases. We believe this balanced approach of strengthening our balance

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sheet while also increasing cash returned to our equity holders offers meaningful value for our current and prospective investors.

Our long-term cash flow visibility is bolstered by the substantial completion of our multi-year system build out, resulting in a significantly lower capex profile going forward, which is illustrated on slide 5. We continue to exercise discipline, limiting our investment capital to "must-do,no-regrets" opportunities. Relative to our prior estimates, we have further reduced our 2021 investment and maintenance capital expectations by $65 million, or roughly 10%. A high-level overview and status update for our two key remaining projects, Wink to Webster and the Diamond expansion and Capline Reversal, are located within the appendix of today's presentation.

With that, I will turn the call over to Al.

Al Swanson:

Thanks, Willie. As shown on slide 6, our first-quarterfee-based Adjusted EBITDA of $559 million exceeded expectations and was in-line with fourth-quarter 2020. First-quarter results benefitted from lower power costs, including gains on power hedges and stronger results in our natural gas storage business, as well as some lower operating expenses that are timing related and we expect to incur later in the year. These benefits more than offset the revenue impacts of the storm-related downtime across our Texas and Mid-Con pipeline systems as well as lower realized revenues at certain non-hub crude terminals and Canadian NGL facilities.

Before I get into the performance relative to our Guidance, and to level set everyone, our first-quarter Supply & Logistics was expected to be weaker than normal because NGL margins for the quarter were locked in during the second half of 2020 and did not reflect the rising prices during the first quarter. Looking forward, our NGL margins for the balance of the year are a little lower than the current market, but are in line with historical margins. Focusing on the first quarter, adjusted EBITDA of a negative $(13) million was below our guidance for the quarter. The primary drivers for the under-performance were a combination of the

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