PAGP · Plains GP Holdings, L.P.

Performance Summary

Plains GP Holdings, L.P. (PAGP) reported consolidated net income of $1.686 billion for FY 2025, a significant increase from $1.070 billion in FY 2024. Net income attributable to PAGP was $260 million, up from $103 million the prior year. Basic net income per Class A share was $1.31, compared to $0.52 in FY 2024. The company's total revenues were $44.26 billion, with product sales revenues of $42.50 billion and services revenues of $1.76 billion. Operating income was $1.43 billion. The results were driven by contributions from recent acquisitions, higher crude oil pipeline volumes, and tariff escalations, partially offset by fewer market-based opportunities and the impact of certain contract rates resetting to market.

Revenue Analysis

Revenues are derived from two primary segments: Crude Oil and NGL. The Crude Oil segment, which includes gathering, transportation, terminalling, storage, and merchant activities, generated Segment Adjusted EBITDA of $2.34 billion, a 3% increase year-over-year. This growth was primarily due to higher tariff volumes, contributions from acquisitions (including the Cactus III pipeline), and tariff escalations. Crude oil pipeline tariff volumes averaged 9,680 thousand barrels per day in 2025, up 8% from 8,934 thousand barrels per day in 2024. The NGL segment, focused on storage and terminalling in the Southwestern U.S., reported a Segment Adjusted EBITDA loss of $34 million, a larger loss than the $21 million loss in FY 2024, primarily due to overhead costs allocated to continuing operations.

Margins & Profitability

The company's operating margin was 3.2% ($1.43 billion operating income / $44.26 billion total revenues). Gross profit, calculated as total revenues less purchases and related costs, was $3.83 billion, resulting in a gross margin of 8.7%. Field operating costs decreased to $1.15 billion from $1.47 billion, partly due to the recognition of costs related to the Line 901 incident in the prior year. General and administrative expenses increased slightly to $348 million. Depreciation and amortization expense increased to $953 million, largely driven by recent acquisitions. Equity earnings in unconsolidated entities were $382 million.

Cash Flow & Balance Sheet

Net cash provided by operating activities was strong at $2.93 billion. Cash used in investing activities was $3.44 billion, primarily for acquisitions ($2.65 billion) and additions to property, equipment and other ($643 million). Cash provided by financing activities was $474 million, including net borrowings and proceeds from senior note issuances offset by distributions and debt repayments. The company ended the period with $329 million in cash and cash equivalents and total assets of $31.28 billion. Total liabilities were $17.06 billion, with partners' capital of $14.22 billion. The company had over $2.0 billion of liquidity available, including available credit facilities and cash.

Outlook

The company's 2026 capital plan projects total investment capital of approximately $440 million ($350 million net to its interest) and maintenance capital of approximately $185 million ($165 million net). Approximately half of the investment capital is expected to be invested in Permian JV assets. The pending sale of the Canadian NGL Business to Keyera for approximately $5.15 billion CAD (~$3.75 billion USD) is expected to close around the end of Q1 2026, subject to regulatory approvals. PAA expects to receive net proceeds of approximately $3.2 billion, after taxes and expenses, which will be used to reduce leverage. The divestiture supports the strategic objective to focus on core midstream crude oil operations. Key risk factors include commodity price volatility, competition, regulatory changes, and the successful execution of the Canadian NGL Business sale.