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What changed in PLAINS GP HOLDINGS LP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PLAINS GP HOLDINGS LP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+270 added−264 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in PLAINS GP HOLDINGS LP's 2025 10-K

270 paragraphs added · 264 removed · 206 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

71 edited+5 added−8 removed337 unchanged
Biggest changeIn the past, the results of such activities have varied significantly based on market conditions and these activities may continue to experience highly variable results as a result of future changes to the markets for crude oil and NGL. 52 Table of Contents Index to Financial Statements Joint ventures, joint ownership arrangements and other capital projects pose unique challenges and PAA may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects.
Biggest changeJoint ventures, joint ownership arrangements and other capital projects pose unique challenges and PAA may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects. PAA is involved in many strategic joint ventures and other joint ownership arrangements.
Risks Related to Conflicts of Interest Our existing organizational structure and the current and future relationships among us, PAA, our respective general partners, the Legacy Owners and affiliated entities present the potential for conflicts of interest.
Risks Related to Conflicts of Interest Our existing organizational structure and the current and future relationships among us, PAA, our respective general partners, the Legacy Owners and affiliated entities present the potential for conflicts of interest.
The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory and policy initiatives that impose more stringent standards for GHG emissions, restrict the areas in which the oil and gas industry may produce crude oil and natural gas or generate GHG emissions, increase scrutiny of environmental permitting or delay such permitting reviews, or require enhanced disclosure of such GHG emission and other climate-related information, or promote and subsidize lower GHG emitting, alternative energy products, could result in reduced demand for crude oil and natural gas, and thus PAA’s services, as well as increase its compliance costs.
The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory and policy initiatives that impose more stringent standards for GHG emissions, restrict the areas in which the oil and gas industry may produce crude oil and natural gas or generate GHG emissions, increase scrutiny of environmental permitting or delay such permitting reviews, require enhanced disclosure of such GHG emission and other climate-related information, or promote and subsidize lower GHG emitting, alternative energy products, could result in reduced demand for crude oil and natural gas, and thus PAA’s services, as well as increase its compliance costs.
Risks Related to PAA’s Business PAA’s business, results of operations, financial condition, cash flows and unit price can be adversely affected by many factors including but not limited to: • the volume of crude oil, natural gas and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of PAA’s pipelines and facilities, which can be negatively impacted by a variety of factors outside of its control; • competition in PAA’s industry, including recontracting and other risks associated with the general capacity overbuild of midstream energy infrastructure in some of the areas where PAA operates; • changes in supply and demand for the products PAA handles and the services it provides, which can be caused by a variety of factors outside of its control; • natural disasters, catastrophes, terrorist attacks (including eco-terrorist attacks), process safety failures, equipment failures or other events, including pipeline or facility accidents; • information or operations technology failures, including cybersecurity attacks, data breaches and other disruptions affecting PAA or its service providers; • risks arising from climate change, energy conservation measures, or initiatives that stimulate demand for alternative forms of energy; • societal and political pressures from various groups, including opposition to the development or operation of PAA’s pipelines and facilities; • increased concern by financial stakeholders with respect to PAA’s governance structure and the perceived social and environmental cost of PAA’s industry; • the overall forward market for crude oil and NGL, and certain market structures, the absence of pricing volatility and other market factors; • an inability to fully implement or realize expected returns or other anticipated benefits associated with acquisitions/divestitures, joint venture and joint ownership arrangements, and other projects; • entering into new businesses in connection with PAA’s strategy to participate in emerging energy opportunities; • loss of PAA’s investment grade credit rating or a significant reduction in the ability of PAA to receive open credit; 39 Table of Contents Index to Financial Statements • the credit risk of PAA’s customers and other counterparties it transacts with in the ordinary course of business activities; • tightened capital markets or other factors that increase PAA’s cost of capital or otherwise limit its access to capital; • the insufficiency of, or non-compliance with, PAA’s risk policies; • PAA’s insurance coverage may not fully cover its losses and it may in the future encounter increased costs related to, and lack of availability of, insurance; • trade tariffs, duties, quotas, inflation, supply disruptions or other factors affecting the commodities and materials PAA uses in its business; • pandemics, epidemics or other public health events; • PAA’s current or future debt levels, or inability to borrow additional funds or capitalize on business opportunities; • changes in interest rates and currency exchange rates; • difficulties recruiting and retaining PAA’s workforce; • an impairment of long-term assets; • significant under-utilization of certain assets due to fixed costs incurred to obtain the right to use such assets; • the cost to repair and maintain PAA’s assets; • PAA does not own all of the land on which its pipelines and facilities are located, which could result in disruptions to its operations; and • the pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin.
Risks Related to PAA’s Business PAA’s business, results of operations, financial condition, cash flows and unit price can be adversely affected by many factors including but not limited to: • the volume of crude oil, natural gas and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of PAA’s pipelines and facilities, which can be negatively impacted by a variety of factors outside of its control; • competition in PAA’s industry, including recontracting and other risks associated with the general capacity overbuild of midstream energy infrastructure in some of the areas where PAA operates; • changes in supply and demand for the products PAA handles and the services it provides, which can be caused by a variety of factors outside of its control; • natural disasters, catastrophes, terrorist attacks (including eco-terrorist attacks), process safety failures, equipment failures or other events, including pipeline or facility accidents; • information or operations technology failures, including cybersecurity attacks, data breaches and other disruptions affecting PAA or its service providers; • risks arising from climate change, energy conservation measures, or initiatives that stimulate demand for alternative forms of energy; • societal and political pressures from various groups, including opposition to the development or operation of PAA’s pipelines and facilities; • increased concern by financial stakeholders with respect to PAA’s governance structure and the perceived social and environmental cost of PAA’s industry; • the overall forward market for crude oil and NGL, and certain market structures, the absence of pricing volatility and other market factors; • an inability to fully implement or realize expected returns or other anticipated benefits associated with acquisitions/divestitures, joint venture and joint ownership arrangements, and other projects; • entering into new businesses in connection with PAA’s strategy to participate in emerging energy opportunities; • loss of PAA’s investment grade credit rating or a significant reduction in the ability of PAA to receive open credit; 38 Table of Contents Index to Financial Statements • the credit risk of PAA’s customers and other counterparties it transacts with in the ordinary course of business activities; • tightened capital markets or other factors that increase PAA’s cost of capital or otherwise limit its access to capital; • the insufficiency of, or non-compliance with, PAA’s risk policies; • PAA’s insurance coverage may not fully cover its losses and it may in the future encounter increased costs related to, and lack of availability of, insurance; • trade tariffs, duties, quotas, inflation, supply disruptions or other factors affecting the commodities and materials PAA uses in its business; • pandemics, epidemics or other public health events; • PAA’s current or future debt levels, or inability to borrow additional funds or capitalize on business opportunities; • changes in interest rates and currency exchange rates; • difficulties recruiting and retaining PAA’s workforce; • an impairment of long-term assets; • significant under-utilization of certain assets due to fixed costs incurred to obtain the right to use such assets; • the cost to repair and maintain PAA’s assets; • PAA does not own all of the land on which its pipelines and facilities are located, which could result in disruptions to its operations; and • the pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin.
Except for Class A shares issued in connection with the exercise of an Exchange Right, which will result in the cancellation of an equivalent number of Class B shares and therefore have no effect on the total number of outstanding shares, the issuance of additional Class A shares or our other equity securities of equal or senior rank, or the issuance by AAP of additional securities, will have the following effects: • each shareholder’s proportionate ownership interest in us may decrease; • the amount of cash available for distribution on each Class A share may decrease; • the relative voting strength of each previously outstanding Class A share may be diminished; • the ratio of taxable income to distributions may increase; and • the market price of the Class A shares may decline. 42 Table of Contents Index to Financial Statements If PAA’s unitholders remove PAA GP as PAA”s general partner, AAP may be required to sell or exchange its indirect general partner interest and we may lose our ability to manage and control PAA.
Except for Class A shares issued in connection with the exercise of an Exchange Right, which will result in the cancellation of an equivalent number of Class B shares and therefore have no effect on the total number of outstanding shares, the issuance of additional Class A shares or our other equity securities of equal or senior rank, or the issuance by AAP of additional securities, will have the following effects: • each shareholder’s proportionate ownership interest in us may decrease; • the amount of cash available for distribution on each Class A share may decrease; • the relative voting strength of each previously outstanding Class A share may be diminished; • the ratio of taxable income to distributions may increase; and • the market price of the Class A shares may decline. 41 Table of Contents Index to Financial Statements If PAA’s unitholders remove PAA GP as PAA’s general partner, AAP may be required to sell or exchange its indirect general partner interest and we may lose our ability to manage and control PAA.
Additionally, the designation of previously unprotected species or the re-designation of under-protected species as threatened or endangered in areas where PAA or its customers conduct operations could cause PAA to incur increased costs arising from species protection measures or could result in delays, restrictions or prohibitions on PAA’s customers’ development and production activities that could have a material adverse effect on its results of operations. 63 Table of Contents Index to Financial Statements Risks Inherent in an Investment in PAA Cost reimbursements due to PAA’s general partner may be substantial and will reduce PAA’s cash available for distribution to its unitholders.
Additionally, the designation of previously unprotected species or the re-designation of under-protected species as threatened or endangered in areas where PAA or its customers conduct operations could cause PAA to incur increased costs arising from species protection measures or could result in delays, restrictions or prohibitions on PAA’s customers’ development and production activities that could have a material adverse effect on its results of operations. 62 Table of Contents Index to Financial Statements Risks Inherent in an Investment in PAA Cost reimbursements due to PAA’s general partner may be substantial and will reduce PAA’s cash available for distribution to its unitholders.
For a description of certain factors that can cause fluctuations in the amount of cash that PAA generates from its business, please read “—Risks Related to PAA’s Business”, “—Risks Related to Laws and Regulations Impacting PAA’s Business”, “—Risks Inherent in an Investment in PAA” and Item 7.
For a description of certain factors that can cause fluctuations in the amount of cash that PAA generates from its business, please read “—Risks Related to PAA’s Business,” “—Risks Related to Laws and Regulations Impacting PAA’s Business,” “—Risks Inherent in an Investment in PAA” and Item 7.
There can be no assurance that there will not be further changes to U.S. federal income tax laws or the Treasury Department’s interpretation of the qualifying income rules in a manner that could impact PAA’s ability to qualify as a partnership in the future. 65 Table of Contents Index to Financial Statements Any modification to the U.S. federal income tax laws and interpretations thereof may or may not be retroactively applied and could make it more difficult or impossible for PAA to meet the exception for certain publicly traded partnerships to be treated as partnerships for U.S. federal income tax purposes.
There can be no assurance that there will not be further changes to U.S. federal income tax laws or the Treasury Department’s interpretation of the qualifying income rules in a manner that could impact PAA’s ability to qualify as a partnership in the future. 64 Table of Contents Index to Financial Statements Any modification to the U.S. federal income tax laws and interpretations thereof may or may not be retroactively applied and could make it more difficult or impossible for PAA to meet the exception for certain publicly traded partnerships to be treated as partnerships for U.S. federal income tax purposes.
Such negative sentiment regarding the hydrocarbon energy industry could influence consumer preferences and government or regulatory actions, which could, in turn, have an adverse impact on PAA’s business. 51 Table of Contents Index to Financial Statements Activists concerned about the potential effects of climate change have directed their attention towards sources of funding for hydrocarbon energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in energy-related activities.
Such negative sentiment regarding the hydrocarbon energy industry could influence consumer preferences and government or regulatory actions, which could, in turn, have an adverse impact on PAA’s business. 50 Table of Contents Index to Financial Statements Activists concerned about the potential effects of climate change have directed their attention towards sources of funding for hydrocarbon energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in energy-related activities.
Additionally, the treatment of PAA as a corporation would increase the portion of our distributions treated as taxable dividends; and • our current tax treatment may change, which could affect the value of our Class A shares or reduce our cash available for distribution, and any decrease in our Class A share price could adversely affect our amount of cash available for distribution. 40 Table of Contents Index to Financial Statements Risks Inherent in an Investment in Us Our cash flow will be entirely dependent upon the ability of PAA to make cash distributions to AAP, and the ability of AAP to make cash distributions to us.
Additionally, the treatment of PAA as a corporation would increase the portion of our distributions treated as taxable dividends; and • our current tax treatment may change, which could affect the value of our Class A shares or reduce our cash available for distribution, and any decrease in our Class A share price could adversely affect our amount of cash available for distribution. 39 Table of Contents Index to Financial Statements Risks Inherent in an Investment in Us Our cash flow will be entirely dependent upon the ability of PAA to make cash distributions to AAP, and the ability of AAP to make cash distributions to us.
The principal elements of competition are rates, processing fees, geographic proximity to the natural gas or NGL mix, available processing and fractionation capacity, transportation alternatives and their associated costs, and access to end-user markets. 48 Table of Contents Index to Financial Statements Changes in supply and demand for the products PAA handles, which can be caused by a variety of factors outside of its control, can negatively affect its operating results.
The principal elements of competition are rates, processing fees, geographic proximity to the natural gas or NGL mix, available processing and fractionation capacity, transportation alternatives and their associated costs, and access to end-user markets. 47 Table of Contents Index to Financial Statements Changes in supply and demand for the products PAA handles, which can be caused by a variety of factors outside of its control, can negatively affect its operating results.
As a result, the price at which our Class A shares will trade may be lower because of the absence or reduction of a takeover premium in the trading price. 43 Table of Contents Index to Financial Statements If PAA’s general partner, which is owned by AAP, is not fully reimbursed or indemnified for obligations and liabilities it incurs in managing the business and affairs of PAA, its value, and, therefore, the value of our Class A shares, could decline.
As a result, the price at which our Class A shares will trade may be lower because of the absence or reduction of a takeover premium in the trading price. 42 Table of Contents Index to Financial Statements If PAA’s general partner, which is owned by AAP, is not fully reimbursed or indemnified for obligations and liabilities it incurs in managing the business and affairs of PAA, its value, and, therefore, the value of our Class A shares, could decline.
Terrorists may target PAA’s physical facilities and hackers may attack its electronic and computer systems. 49 Table of Contents Index to Financial Statements If one or more of PAA’s pipelines or other facilities, including electronic and computer systems, or any facilities or businesses that deliver products, supplies or services to PAA or that it relies on in order to operate its business, are damaged by severe weather or any other disaster, accident, catastrophe, terrorist attack or event, its operations could be significantly interrupted.
Terrorists may target PAA’s physical facilities and hackers may attack its electronic and computer systems. 48 Table of Contents Index to Financial Statements If one or more of PAA’s pipelines or other facilities, including electronic and computer systems, or any facilities or businesses that deliver products, supplies or services to PAA or that it relies on in order to operate its business, are damaged by severe weather or any other disaster, accident, catastrophe, terrorist attack or event, its operations could be significantly interrupted.
PAA’s obligations to the holders of PAA’s preferred units could also limit its ability to obtain additional financing or increase its borrowing costs, which could have an adverse effect on PAA’s financial condition. 64 Table of Contents Index to Financial Statements Tax Risks As our only cash-generating assets consist of our partnership interest in AAP and its related direct and indirect interests in PAA, our tax risks are primarily derivative of the tax risks associated with an investment in PAA.
PAA’s obligations to the holders of PAA’s preferred units could also limit its ability to obtain additional financing or increase its borrowing costs, which could have an adverse effect on PAA’s financial condition. 63 Table of Contents Index to Financial Statements Tax Risks As our only cash-generating assets consist of our partnership interest in AAP and its related direct and indirect interests in PAA, our tax risks are primarily derivative of the tax risks associated with an investment in PAA.
A decision by a shipper to substantially reduce or cease to ship volumes of crude oil on PAA’s pipelines could cause a significant decline in its revenues. 47 Table of Contents Index to Financial Statements To maintain the volumes of crude oil PAA purchases in connection with its operations, PAA must continue to contract for new supplies of crude oil to offset volumes lost because of reduced drilling activity by producers, natural declines in crude oil production from depleting wells or volumes lost to competitors.
A decision by a shipper to substantially reduce or cease to ship volumes of crude oil on PAA’s pipelines could cause a significant decline in its revenues. 46 Table of Contents Index to Financial Statements To maintain the volumes of crude oil PAA purchases in connection with its operations, PAA must continue to contract for new supplies of crude oil to offset volumes lost because of reduced drilling activity by producers, natural declines in crude oil production from depleting wells or volumes lost to competitors.
This decline could result in our being subject to tax sooner than expected, our tax liability being greater than expected, or a greater portion of our distributions being treated as taxable dividends. 66 Table of Contents Index to Financial Statements The IRS Forms 1099-DIV that our shareholders receive from their brokers may over-report dividend income with respect to our shares for U.S. federal income tax purposes, which may result in a shareholder’s overpayment of tax.
This decline could result in our being subject to tax sooner than expected, our tax liability being greater than expected, or a greater portion of our distributions being treated as taxable dividends. 65 Table of Contents Index to Financial Statements The IRS Forms 1099-DIV that our shareholders receive from their brokers may over-report dividend income with respect to our shares for U.S. federal income tax purposes, which may result in a shareholder’s overpayment of tax.
Thees projects can involve the expansion, modification, divestiture or combination of existing assets or the construction of new midstream energy infrastructure assets and involve numerous regulatory, environmental, commercial, economic, weather-related, political and legal uncertainties that are beyond its control, including the following: • PAA may be unable to realize its forecasted commercial, operational or administrative synergies in connection with its joint ventures and joint ownership arrangements, including the Permian JV; • Joint ventures and other joint ownership arrangements may demand substantial internal resources and may divert resources and attention from other areas of PAA’s business; • PAA may construct pipelines, facilities or other assets in anticipation of market demand that dissipates or market growth that never materializes; • Despite the fact that PAA will expend significant amounts of capital during the construction phase of growth or expansion projects, revenues associated with these organic growth projects will not materialize until the projects have been completed and placed into commercial service, and the amount of revenue generated from these projects could be significantly lower than anticipated for a variety of reasons; • As these projects are undertaken, required approvals, permits and licenses may not be obtained, may be delayed, may be obtained with conditions that materially alter the expected return associated with the underlying projects or may be granted and then subsequently withdrawn; • PAA may face opposition to its planned projects from environmental groups, landowners, local groups and other advocates, including lawsuits or other actions designed to disrupt or delay PAA’s planned projects; • PAA may not be able to obtain, or PAA may be significantly delayed in obtaining, all of the rights of way or other real property interests it needs to complete such projects, or the costs PAA incurs in order to obtain such rights of way or other interests may be greater than PAA anticipated; • Due to unavailability or costs of materials, supplies, power, labor or equipment, including increased costs associated with any import duties or requirements to source certain supplies or materials from U.S. suppliers or manufacturers, the cost of completing these projects could turn out to be significantly higher than PAA budgeted and the time it takes to complete construction of these projects and place them into commercial service could be significantly longer than planned; and • The completion or success of PAA’s projects may depend on the completion or success of third-party facilities over which PAA has no control.
These projects can involve the expansion, modification, divestiture or combination of existing assets or the construction of new midstream energy infrastructure assets and involve numerous regulatory, environmental, commercial, economic, weather-related, political and legal uncertainties that are beyond its control, including the following: • PAA may be unable to realize its forecasted commercial, operational or administrative synergies in connection with its joint ventures and joint ownership arrangements, including the Permian JV; • Joint ventures and other joint ownership arrangements may demand substantial internal resources and may divert resources and attention from other areas of PAA’s business; • PAA may construct pipelines, facilities or other assets in anticipation of market demand that dissipates or market growth that never materializes; • Despite the fact that PAA will expend significant amounts of capital during the construction phase of growth or expansion projects, revenues associated with these organic growth projects will not materialize until the projects have been completed and placed into commercial service, and the amount of revenue generated from these projects could be significantly lower than anticipated for a variety of reasons; • As these projects are undertaken, required approvals, permits and licenses may not be obtained, may be delayed, may be obtained with conditions that materially alter the expected return associated with the underlying projects or may be granted and then subsequently withdrawn; • PAA may face opposition to its planned projects from environmental groups, landowners, local groups and other advocates, including lawsuits or other actions designed to disrupt or delay PAA’s planned projects; • PAA may not be able to obtain, or PAA may be significantly delayed in obtaining, all of the rights of way or other real property interests it needs to complete such projects, or the costs PAA incurs in order to obtain such rights of way or other interests may be greater than PAA anticipated; 52 Table of Contents Index to Financial Statements • Due to unavailability or costs of materials, supplies, power, labor or equipment, including increased costs associated with any import duties or requirements to source certain supplies or materials from U.S. suppliers or manufacturers, the cost of completing these projects could turn out to be significantly higher than PAA budgeted and the time it takes to complete construction of these projects and place them into commercial service could be significantly longer than planned; and • The completion or success of PAA’s projects may depend on the completion or success of third-party facilities over which PAA has no control.
If PAA were to incur a significant liability for which it was not fully insured, or if PAA incurred costs in excess of reserves established for uninsured or self-insured risks, it could have a material adverse effect on PAA’s financial position, results of operations and cash flows. 50 Table of Contents Index to Financial Statements PAA’s and its customers’ operations are subject to various risks arising out of the threat of climate change.
If PAA were to incur a significant liability for which it was not fully insured, or if PAA incurred costs in excess of reserves established for uninsured or self-insured risks, it could have a material adverse effect on PAA’s financial position, results of operations and cash flows. 49 Table of Contents Index to Financial Statements PAA’s and its customers’ operations are subject to various risks arising out of the threat of climate change.
For example, the Legacy Owners may have different tax positions from us which could influence their decisions regarding whether and when to cause us to dispose of assets. 46 Table of Contents Index to Financial Statements Furthermore, conflicts of interest could arise in the future between us, on the one hand, and the Legacy Owners, on the other hand, concerning among other things, potential competitive business activities or business opportunities.
For example, the Legacy Owners may have different tax positions from us which could influence their decisions regarding whether and when to cause us to dispose of assets. 45 Table of Contents Index to Financial Statements Furthermore, conflicts of interest could arise in the future between us, on the one hand, and the Legacy Owners, on the other hand, concerning among other things, potential competitive business activities or business opportunities.
Although PAA’s general partner may elect to have PAA’s unitholders and former unitholders take such audit adjustment into account and pay any resulting taxes (including applicable penalties or interest) in accordance with their interests in PAA during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances.
Although PAA’s general partner may elect to have PAA’s unitholders and former unitholders take such audit adjustments into account and pay any resulting taxes (including applicable penalties or interest) in accordance with their interests in PAA during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances.
The resolution of these conflicts may not always be in our best interest or that of our shareholders. 45 Table of Contents Index to Financial Statements Our partnership agreement defines our general partner’s duties to us and contains provisions that reduce the remedies available to our shareholders for actions that might otherwise be challenged as breaches of fiduciary or other duties under state law.
The resolution of these conflicts may not always be in our best interest or that of our shareholders. 44 Table of Contents Index to Financial Statements Our partnership agreement defines our general partner’s duties to us and contains provisions that reduce the remedies available to our shareholders for actions that might otherwise be challenged as breaches of fiduciary or other duties under state law.
Consequently, if distributions on our Class A shares are not paid with respect to any fiscal quarter, our Class A shareholders will not be entitled to receive that quarter’s payments in the future. 41 Table of Contents Index to Financial Statements The amount of cash that we and PAA distribute each quarter may limit our ability to grow.
Consequently, if distributions on our Class A shares are not paid with respect to any fiscal quarter, our Class A shareholders will not be entitled to receive that quarter’s payments in the future. 40 Table of Contents Index to Financial Statements The amount of cash that we and PAA distribute each quarter may limit our ability to grow.
We may also issue additional Class A shares or convertible securities in subsequent public or private offerings. 44 Table of Contents Index to Financial Statements We cannot predict the size of future issuances of our Class A shares or securities convertible into Class A shares or the effect, if any, that future issuances and sales of our Class A shares will have on the market price of our Class A shares.
We may also issue additional Class A shares or convertible securities in subsequent public or private offerings. 43 Table of Contents Index to Financial Statements We cannot predict the size of future issuances of our Class A shares or securities convertible into Class A shares or the effect, if any, that future issuances and sales of our Class A shares will have on the market price of our Class A shares.
Generally accepted accounting principles in the United States (“GAAP”) requires that a valuation allowance must be established for deferred tax assets when it is more likely than not that they will not be realized. We believe that the deferred tax asset we recorded through 2024 will be realized and that a valuation allowance is not required.
Generally accepted accounting principles in the United States (“GAAP”) requires that a valuation allowance must be established for deferred tax assets when it is more likely than not that they will not be realized. We believe that the deferred tax asset we recorded through 2025 will be realized and that a valuation allowance is not required.
At December 31, 2024, the Legacy Owners owned approximately 15% of our outstanding Class A and Class B shares. Without the support of our Legacy Owners, such ownership level may make it more difficult for our Class A shareholders to obtain the requisite vote level required to remove our general partner.
At December 31, 2025, the Legacy Owners owned approximately 15% of our outstanding Class A and Class B shares. Without the support of our Legacy Owners, such ownership level may make it more difficult for our Class A shareholders to obtain the requisite vote level required to remove our general partner.
The amount of PAA’s current or future indebtedness could have significant effects on its operations, including, among other things: • a significant portion of PAA’s cash flow will be dedicated to the payment of principal and interest on its indebtedness and may not be available for other purposes, including the payment of distributions on its units and capital expenditures; • credit rating agencies may view PAA’s debt level negatively; • covenants contained in PAA’s existing debt arrangements will require it to continue to meet financial tests that may adversely affect its flexibility to plan for and react to changes in its business; • PAA’s ability to obtain additional financing for working capital, capital expenditures, acquisitions and general partnership purposes may be limited; 57 Table of Contents Index to Financial Statements • PAA may be at a competitive disadvantage relative to similar companies that have less debt; and • PAA may be more vulnerable to adverse economic and industry conditions as a result of its significant debt level.
The amount of PAA’s current or future indebtedness could have significant effects on its operations, including, among other things: • a significant portion of PAA’s cash flow will be dedicated to the payment of principal and interest on its indebtedness and may not be available for other purposes, including the payment of distributions on its units and capital expenditures; • credit rating agencies may view PAA’s debt level negatively; • covenants contained in PAA’s existing debt arrangements will require it to continue to meet financial tests that may adversely affect its flexibility to plan for and react to changes in its business; • PAA’s ability to obtain additional financing for working capital, capital expenditures, acquisitions and general partnership purposes may be limited; • PAA may be at a competitive disadvantage relative to similar companies that have less debt; and • PAA may be more vulnerable to adverse economic and industry conditions as a result of its significant debt level.
PAA cannot provide any assurance as to the ultimate amount or timing of future pipeline integrity expenditures but any such expenditures could be significant. See “Environmental — General” in Note 18 to our Consolidated Financial Statements.
PAA cannot provide any assurance as to the ultimate amount or timing of future pipeline integrity expenditures but any such expenditures could be significant. See “Environmental — General” in Note 19 to our Consolidated Financial Statements.
The Legacy Owners may have interests that conflict with holders of our Class A shares. At December 31, 2024, the Legacy Owners owned approximately 15% of our outstanding Class A and Class B shares and approximately 15% of the AAP units. As a result, the Legacy Owners may have conflicting interests with holders of Class A shares.
The Legacy Owners may have interests that conflict with holders of our Class A shares. At December 31, 2025, the Legacy Owners owned approximately 15% of our outstanding Class A and Class B shares and approximately 15% of the AAP units. As a result, the Legacy Owners may have conflicting interests with holders of Class A shares.
To the extent possible, PAA’s general partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the IRS or, if PAA is eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return.
To the extent possible, under these rules, PAA’s general partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the IRS or, if PAA is eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return.
As of December 31, 2024, PAA had over $2.6 billion of liquidity available, including cash and cash equivalents and available borrowing capacity under its senior unsecured revolving credit facility and its senior secured hedged inventory facility, subject to continued covenant compliance. Lower Adjusted EBITDA could increase PAA’s leverage ratios and effectively reduce its ability to incur additional indebtedness.
As of December 31, 2025, PAA had over $2.0 billion of liquidity available, including cash and cash equivalents and available borrowing capacity under its senior unsecured revolving credit facility and its senior secured hedged inventory facility, subject to continued covenant compliance. Lower Adjusted EBITDA could increase PAA’s leverage ratios and effectively reduce its ability to incur additional indebtedness.
At December 31, 2024, through their ownership of Class B shares, the Legacy Owners held approximately 15% of the combined voting power of our Class A and Class B shares.
At December 31, 2025, through their ownership of Class B shares, the Legacy Owners held approximately 15% of the combined voting power of our Class A and Class B shares.
If PAA is unable to successfully complete, integrate or realize the anticipated benefits of future acquisitions or planned divestitures (due to reduced investment in the energy sector, governmental action, litigation, counterparty non-performance or other factors), it may be more difficult for PAA to implement its business strategies, maintain its desired leverage levels, increase returns to equity holders or otherwise accomplish its financial goals.
If PAA is unable to successfully complete, integrate or realize the anticipated benefits of its recent or future acquisitions or planned divestitures (due to reduced investment in the energy sector, governmental action, litigation, counterparty non-performance or other factors), including the Canadian NGL Business divestiture, it may be more difficult for PAA to implement its business strategies, maintain its desired leverage levels, increase returns to equity holders or otherwise accomplish its financial goals.
Any loss of rights with respect to real property, through PAA’s inability to renew right-of-way contracts or otherwise, could have a material adverse effect on its business, results of operations, and financial position. The pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin.
Any loss of rights with respect to real property, through PAA’s inability to renew right-of-way contracts or otherwise, could have a material adverse effect on its business, results of operations, and financial position. 58 Table of Contents Index to Financial Statements The pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin.
At December 31, 2024, the Legacy Owners owned approximately 15% of the Class A shares and Class B shares on a combined basis.
At December 31, 2025, the Legacy Owners owned approximately 15% of the Class A shares and Class B shares on a combined basis.
We did not have any earnings and profits in 2024 and we do not expect to have any earnings and profits for an extended period of time.
We did not have any earnings and profits in 2025 and we do not expect to have any earnings and profits for an extended period of time.
Any significant increase in these expenditures could adversely affect PAA’s results of operations, financial position or cash flows, as well as its ability to make cash distributions to its unitholders. 59 Table of Contents Index to Financial Statements PAA does not own all of the land on which its pipelines and facilities are located, which could result in disruptions to its operations.
Any significant increase in these expenditures could adversely affect PAA’s results of operations, financial position or cash flows, as well as its ability to make cash distributions to its unitholders. PAA does not own all of the land on which its pipelines and facilities are located, which could result in disruptions to its operations.
“Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities—Cash Distribution Policy.” The distributions AAP is entitled to receive may fluctuate, which may reduce cash distributions to our Class A shareholders. At December 31, 2024, we owned an approximate 85% limited partner interest in AAP, which owned approximately 232.9 million PAA common units.
“Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities—Cash Distribution Policy.” The distributions AAP is entitled to receive may fluctuate, which may reduce cash distributions to our Class A shareholders. At December 31, 2025, we owned an approximate 85% limited partner interest in AAP, which owned approximately 233.0 million PAA common units.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreements, Commercial Paper Program and Indentures.” PAA’s ability to access capital markets to raise capital on favorable terms will be affected by its debt level, its operating and financial performance, the amount of its current maturities and debt maturing in the next several years, and by prevailing market conditions.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreements, Commercial Paper Program, Term Loan and Indentures.” 56 Table of Contents Index to Financial Statements PAA’s ability to access capital markets to raise capital on favorable terms will be affected by its debt level, its operating and financial performance, the amount of its current maturities and debt maturing in the next several years, and by prevailing market conditions.
For example, if the U.S. dollar appreciates against the Canadian dollar, the U.S. dollar value of PAA’s Canadian dollar denominated earnings is reduced for U.S. reporting purposes. 58 Table of Contents Index to Financial Statements PAA’s business requires the retention and recruitment of a skilled workforce, and difficulties retaining and recruiting its workforce could result in a failure to implement PAA’s business plans.
For example, if the U.S. dollar appreciates against the Canadian dollar, the U.S. dollar value of PAA’s Canadian dollar denominated earnings is reduced for U.S. reporting purposes. PAA’s business requires the retention and recruitment of a skilled workforce, and difficulties retaining and recruiting its workforce could result in a failure to implement PAA’s business plans.
Despite such efforts, PAA can provide no assurance that the FERC and other agencies that regulate its business will not issue future orders or declarations that increase its costs or otherwise adversely affect its operations. 61 Table of Contents Index to Financial Statements PAA’s Canadian pipelines are subject to regulation by the CER and by provincial authorities.
Despite such efforts, PAA can provide no assurance that the FERC and other agencies that regulate its business will not issue future orders or declarations that increase its costs or otherwise adversely affect its operations. PAA’s Canadian pipelines are subject to regulation by the CER and by provincial authorities.
If PAA is unable to (i) retain current employees; and/or (ii) recruit new employees of comparable knowledge and experience, PAA’s business could be negatively impacted. In addition, PAA could experience increased costs to retain current employees and recruit new employees. An impairment of long-term assets could reduce PAA’s earnings.
If PAA is unable to (i) retain current employees; and/or (ii) recruit new employees of comparable knowledge and experience, PAA’s business could be negatively impacted. In addition, PAA could experience increased costs to retain current employees and recruit new employees. 57 Table of Contents Index to Financial Statements An impairment of long-term assets could reduce PAA’s earnings.
Any such renegotiation or rejection could have an adverse effect on PAA’s revenue and cash flows and its ability to make cash distributions to its unitholders. PAA has also undertaken numerous projects that require cooperation with and performance by joint venture co-owners.
Any such renegotiation or rejection could have an adverse effect on PAA’s revenue and cash flows and its ability to make cash distributions to its unitholders. 53 Table of Contents Index to Financial Statements PAA has also undertaken numerous projects that require cooperation with and performance by joint venture co-owners.
A valuation allowance on our deferred tax asset could reduce our earnings. As of December 31, 2024, we had a gross deferred tax asset of approximately $1.3 billion.
A valuation allowance on our deferred tax asset could reduce our earnings. As of December 31, 2025, we had a gross deferred tax asset of approximately $1.2 billion.
Any new laws, executive orders or regulations, or changes to or interpretations of existing laws or regulations, adverse to PAA could have a material adverse effect on its financial position, results of operations and cash flows. 60 Table of Contents Index to Financial Statements PAA has a history of making incremental additions to the miles of pipelines it owns, both through acquisitions and investment capital projects.
Any new laws, executive orders or regulations, or changes to or interpretations of existing laws or regulations, adverse to PAA could have a material adverse effect on its financial position, results of operations and cash flows. PAA has a history of increasing the miles of pipelines it owns, both through acquisitions and investment capital projects.
Although PAA has credit risk management policies and procedures that are designed to mitigate and limit its exposure in this area, there can be no assurance that PAA has adequately assessed and managed the creditworthiness of its existing or future counterparties or that there will not be an unanticipated deterioration in their creditworthiness or unexpected instances of nonpayment or nonperformance, all of which could have an adverse impact on PAA’s cash flow and its ability to pay or increase its cash distributions to its partners. 54 Table of Contents Index to Financial Statements PAA has a number of minimum volume commitment contracts that support its pipelines.
Although PAA has credit risk management policies and procedures that are designed to mitigate and limit its exposure in this area, there can be no assurance that PAA has adequately assessed and managed the creditworthiness of its existing or future counterparties or that there will not be an unanticipated deterioration in their creditworthiness or unexpected instances of nonpayment or nonperformance, all of which could have an adverse impact on PAA’s cash flow and its ability to pay or increase its cash distributions to its partners.
At December 31, 2024, we owned an approximate 85% limited partner interest in AAP, which directly owned a limited partner interest in PAA through its ownership of approximately 232.9 million PAA common units (approximately 30% of PAA’s Series A preferred units and common units combined).
At December 31, 2025, we owned an approximate 85% limited partner interest in AAP, which directly owned a limited partner interest in PAA through its ownership of approximately 233.0 million PAA common units (approximately 31% of PAA’s Series A preferred units and common units combined).
In addition, certain of the pipelines in which PAA owns a joint venture interest have minimum volume commitment contracts.
PAA has a number of minimum volume commitment contracts that support its pipelines. In addition, certain of the pipelines in which PAA owns a joint venture interest have minimum volume commitment contracts.
At December 31, 2024, PAA had approximately $15.4 billion of net property and equipment, $968 million of linefill, $2.8 billion of investments accounted for under the equity method of accounting and approximately $1.7 billion of net intangible assets capitalized on its balance sheet.
At December 31, 2025, PAA had approximately $16.9 billion of net property and equipment, $900 million of linefill, $2.8 billion of investments accounted for under the equity method of accounting and approximately $1.8 billion of net intangible assets capitalized on its balance sheet.
As of December 31, 2024, the face value of PAA’s consolidated debt was approximately $7.7 billion (excluding unamortized discounts and debt issuance costs of approximately $42 million), substantially all of which was at fixed interest rates.
As of December 31, 2025, the face value of PAA’s consolidated debt was approximately $11.3 billion (excluding net unamortized discounts and debt issuance costs of approximately $66 million), substantially all of which was at fixed interest rates.
Legislation, executive orders and regulatory initiatives relating to climate change could have a material adverse effect on PAA’s business, demand for its services, financial condition, results of operations and cash flows.
Any such changes could have a material adverse effect on PAA, its financial condition and its results of operations. 61 Table of Contents Index to Financial Statements Legislation, executive orders and regulatory initiatives relating to climate change could have a material adverse effect on PAA’s business, demand for its services, financial condition, results of operations and cash flows.
Acquisitions also involve potential risks, including: • performance from the acquired businesses or assets that is below the forecasts PAA used in evaluating the acquisition; • a significant increase in PAA’s indebtedness and working capital requirements; • the inability to timely and effectively integrate the operations of recently acquired businesses or assets; • the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets for which PAA is either not fully insured or indemnified, including liabilities arising from the operation of the acquired businesses or assets prior to PAA’s acquisition; • risks associated with operating in lines of business that are distinct and separate from PAA’s historical operations; • customer or key employee loss from the acquired businesses; and • the diversion of management’s attention from other business concerns.
In addition, in connection with our divestitures, PAA may agree to retain responsibility for certain liabilities that relate to its period of ownership, which could adversely impact its future financial performance. 51 Table of Contents Index to Financial Statements Acquisitions also involve potential risks, including: • performance from the acquired businesses or assets that is below the forecasts PAA used in evaluating the acquisition; • a significant increase in PAA’s indebtedness and working capital requirements; • the inability to timely and effectively integrate the operations of recently acquired businesses or assets; • the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets for which PAA is either not fully insured or indemnified, including liabilities arising from the operation of the acquired businesses or assets prior to PAA’s acquisition; • risks associated with operating in lines of business that are distinct and separate from PAA’s historical operations; • customer or key employee loss from the acquired businesses; and • the diversion of management’s attention from other business concerns.
To the extent these products become subject to import tariffs in the U.S., it could expose PAA to costs that it cannot recover from its customers.Existing and future trade tariffs, import duties and quotas could also materially increase PAA’s costs of procuring the commodities and materials it uses and disrupt the markets for the products it handles, which in turn could have a material adverse effect on its financial position, results of operations and cash flows.
Existing and future trade tariffs, import duties and quotas could also materially increase PAA’s costs of procuring the commodities and materials it uses and disrupt the markets for the products it handles, which in turn could have a material adverse effect on its financial position, results of operations and cash flows.
If PAA is unable to obtain commodities sufficient to operate and maintain its assets, or only able to do so at commercially unreasonable prices, it could materially and adversely affect PAA’s business.
PAA’s business also depends on having access to significant amounts of electricity and other commodities. If PAA is unable to obtain commodities sufficient to operate and maintain its assets, or only able to do so at commercially unreasonable prices, it could materially and adversely affect PAA’s business.
If PAA is unable to execute on this strategy or operate these new lines of business effectively, PAA’s future growth could be limited. These new lines of business may never develop or may present risks that PAA cannot effectively manage.
PAA may enter into new businesses in connection with its strategy to participate in emerging energy opportunities. If PAA is unable to execute on this strategy or operate these new lines of business effectively, PAA’s future growth could be limited. These new lines of business may never develop or may present risks that PAA cannot effectively manage.
PAA’s purchases and sales may also be subject to certain reporting and other requirements. Additionally, to the extent that PAA enters into transportation contracts with pipelines that are subject to FERC regulation, it is subject to FERC requirements related to the use of such capacity.
Additionally, to the extent that PAA enters into transportation contracts with pipelines that are subject to FERC regulation, it is subject to FERC requirements related to the use of such capacity.
These agencies have imposed broad regulations prohibiting fraud and manipulation of such markets. With regard to PAA’s physical purchases and sales of crude oil, natural gas or NGL and any related hedging activities that it undertakes, PAA is required to observe the market-related regulations enforced by these agencies, which hold substantial enforcement authority.
With regard to PAA’s physical purchases and sales of crude oil, natural gas or NGL and any related hedging activities that it undertakes, PAA is required to observe the market-related regulations enforced by these agencies, which hold substantial enforcement authority. PAA’s purchases and sales may also be subject to certain reporting and other requirements.
If PAA experiences a shortage in the supply of these materials or is unable to source sufficient quantities of high quality materials at acceptable prices and in a timely manner, it could materially and adversely affect PAA’s ability to construct new infrastructure and maintain its existing assets. 56 Table of Contents Index to Financial Statements PAA’s business also depends on having access to significant amounts of electricity and other commodities.
If PAA experiences a shortage in the supply of these materials or is unable to source sufficient quantities of high quality materials at acceptable prices and in a timely manner, it could materially and adversely affect PAA’s ability to construct new infrastructure and maintain its existing assets.
These rules have been subject to legal challenges, and in April 2024 the SEC issued a voluntary stay of its rules. Although the outcome of these challenges is not yet known and the ultimate impact of these rules on PAA’s business is uncertain, compliance with the rules, if implemented, will result in additional legal, accounting and financial compliance costs.
Although the outcome of pending legal challenges is not yet known and the ultimate impact of these rules on PAA’s business is uncertain, compliance with the rules, if implemented, will result in additional legal, accounting and financial compliance costs.
The current statutory or regulatory provisions implementing derivatives regulations could be amended, and PAA cannot predict the impact on its hedging activities of any future amendments. Any such changes could have a material adverse effect on PAA, its financial condition and its results of operations.
The current statutory or regulatory provisions implementing derivatives regulations could be amended, and PAA cannot predict the impact on its hedging activities of any future amendments.
The process involves the injection of water, sand and chemicals under pressure into the formation to fracture the surrounding rock and stimulate production, and it is typically regulated by state and provincial oil and gas commissions.
Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons from unconventional geological formations. The process involves the injection of water, sand and chemicals under pressure into the formation to fracture the surrounding rock and stimulate production, and it is typically regulated by state and provincial oil and gas commissions.
As of December 31, 2024, the face value of PAA’s consolidated debt outstanding was approximately $7.7 billion (excluding unamortized discounts and debt issuance costs of approximately $42 million), consisting of approximately $7.3 billion face value of long-term debt (including senior notes and finance lease obligations) and approximately $408 million of short-term borrowings.
As of December 31, 2025, the face value of PAA’s consolidated debt outstanding was approximately $11.3 billion (excluding net unamortized discounts and debt issuance costs of approximately $66 million), consisting of approximately $10.8 billion face value of long-term debt (including senior notes, term loan, commercial paper and finance lease obligations) and approximately $0.6 billion of short-term borrowings.
If funding is not available when needed, or is available only on unfavorable terms, PAA may be unable to implement its development plans, enhance its existing business, complete strategic projects and transactions, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on its cash flows and results of operations. 55 Table of Contents Index to Financial Statements PAA’s risk policies cannot eliminate all risks and the insufficiency of, or non-compliance with its risk policies could result in significant financial losses.
If funding is not available when needed, or is available only on unfavorable terms, PAA may be unable to implement its development plans, enhance its existing business, complete strategic projects and transactions, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on its cash flows and results of operations.
Any of these factors could adversely affect PAA’s ability to achieve anticipated levels of cash flows or other benefits from its acquisitions, pay distributions to its partners or meet its debt service requirements. PAA may enter into new businesses in connection with its strategy to participate in emerging energy opportunities.
Any of these factors could adversely affect PAA’s ability to achieve anticipated levels of cash flows or other benefits from its acquisitions, pay distributions to its partners or meet its debt service requirements.
As a result of these uncertainties, the anticipated benefits associated with PAA’s joint ventures, joint ownership arrangements and other capital projects may not be achieved or could be delayed.
As a result of these uncertainties, the anticipated benefits associated with PAA’s joint ventures, joint ownership arrangements and other capital projects may not be achieved or could be delayed. In turn, this could negatively impact PAA’s cash flow and its ability to make or increase cash distributions to its partners.
For more information, please see our regulatory disclosure entitled “Pipeline Safety/Integrity Management.” The adoption of new regulations requiring more comprehensive or stringent safety standards could require PAA to install new or modified safety controls, pursue new capital projects, or conduct maintenance programs on an accelerated basis, all of which could require PAA to incur increased operational costs that could be significant.
For more information, please see our regulatory disclosure entitled “Pipeline Safety/Integrity Management.” The adoption of new regulations requiring more comprehensive or stringent safety standards could require PAA to install new or modified safety controls, pursue new capital projects, or conduct maintenance programs on an accelerated basis, all of which could require PAA to incur increased operational costs that could be significant. 59 Table of Contents Index to Financial Statements Although PAA continues to focus on pipeline and facility integrity management as a primary operational emphasis, doing so requires substantial time and resources and cannot eliminate all risk of releases.
PAA has taken steps within its organization to implement processes and procedures designed to detect unauthorized trading and non-compliance with its risk policies; however, PAA can provide no assurance that these steps will detect and prevent all violations of its risk policies and procedures, particularly if deception, collusion or other intentional misconduct is involved.
PAA has taken steps within its organization to implement processes and procedures designed to detect unauthorized trading and non-compliance with its risk policies; however, PAA can provide no assurance that these steps will detect and prevent all violations of its risk policies and procedures, particularly if deception, collusion or other intentional misconduct is involved. 54 Table of Contents Index to Financial Statements PAA’s insurance coverage may not fully cover its losses and it may in the future encounter increased costs related to, and lack of availability of, insurance.
Furthermore, Presidential Permits that allow cross-border movements of crude oil may be revoked or terminated at any time. PAA’s purchases and sales of crude oil, natural gas and NGL, and hedging activities, expose it to potential regulatory risks. The FTC, the FERC and the CFTC hold statutory authority to monitor certain segments of the physical and futures energy commodities markets.
Furthermore, Presidential Permits that allow cross-border movements of crude oil may be revoked or terminated at any time. 60 Table of Contents Index to Financial Statements PAA’s purchases and sales of crude oil, natural gas and NGL, and hedging activities, expose it to potential regulatory risks.
Posting of additional cash margin or collateral could affect PAA’s liquidity (defined as unrestricted cash on hand plus available capacity under our credit facilities) and reduce its ability to use cash for capital expenditures or other partnership purposes. 62 Table of Contents Index to Financial Statements Even if PAA itself is not required to post additional cash margin or collateral for its derivative contracts, the banks and other derivatives dealers who are PAA’s contractual counterparties will be required to comply with other new requirements under the Dodd-Frank Act and related rules.
Even if PAA itself is not required to post additional cash margin or collateral for its derivative contracts, the banks and other derivatives dealers who are PAA’s contractual counterparties will be required to comply with other new requirements under the Dodd-Frank Act and related rules.
The effects of a public health event depend on a wide variety of factors that are outside of our control, including the clinical severity and transmissibility of the virus or pathogen; the development, deployment, adoption and effectiveness of treatments and vaccines; the capacity of healthcare systems and public health infrastructure; and the response of public health authorities, governments and individuals in areas impacted by such event.
The effects of a public health event depend on a wide variety of factors that are outside of our control, including the clinical severity and transmissibility of the virus or pathogen; the development, deployment, adoption and effectiveness of treatments and vaccines; the capacity of healthcare systems and public health infrastructure; and the response of public health authorities, governments and individuals in areas impacted by such event. 55 Table of Contents Index to Financial Statements Loss of PAA’s investment grade credit rating or the ability to receive open credit could negatively affect its borrowing costs, ability to purchase crude oil, NGL and natural gas supplies or to capitalize on market opportunities.
In addition, enhanced climate-related disclosure requirements could influence stakeholders and lenders to restrict or seek more stringent conditions with respect to their investments in certain carbon-intensive sectors.
In addition, enhanced climate-related disclosure requirements could influence stakeholders and lenders to restrict or seek more stringent conditions with respect to their investments in certain carbon-intensive sectors. Legislation, executive orders and regulatory initiatives relating to hydraulic fracturing or other hydrocarbon development activities could reduce domestic production of crude oil and natural gas.
PAA exports crude oil and NGL from Canada into U.S. markets.
PAA exports crude oil and NGL from Canada into U.S. markets. To the extent these products become subject to import tariffs in the U.S., it could expose PAA to costs that it cannot recover from its customers.
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PAA is involved in many strategic joint ventures and other joint ownership arrangements.
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In the past, the results of such activities have varied significantly based on market conditions and these activities may continue to experience highly variable results as a result of future changes to the markets for crude oil and NGL. Acquisitions and divestitures involve risks that may adversely affect PAA’s business.
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In turn, this could negatively impact PAA’s cash flow and its ability to make or increase cash distributions to its partners. 53 Table of Contents Index to Financial Statements Acquisitions and divestitures involve risks that may adversely affect PAA’s business.
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PAA’s risk policies cannot eliminate all risks and the insufficiency of, or non-compliance with its risk policies could result in significant financial losses.
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In addition, in connection with our divestitures, PAA may agree to retain responsibility for certain liabilities that relate to its period of ownership, which could adversely impact its future financial performance.
Added
The FTC, the FERC and the CFTC hold statutory authority to monitor certain segments of the physical and futures energy commodities markets. These agencies have imposed broad regulations prohibiting fraud and manipulation of such markets.
Removed
PAA’s insurance coverage may not fully cover its losses and it may in the future encounter increased costs related to, and lack of availability of, insurance.
Added
Posting of additional cash margin or collateral could affect PAA’s liquidity (defined as unrestricted cash on hand plus available capacity under our credit facilities) and reduce its ability to use cash for capital expenditures or other partnership purposes.
Removed
For a discussion of our Line 901 Incident insurance receivable, please read Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates— Line 901 Incident Insurance Receivable” and Note 18 to our Consolidated Financial Statements.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity leadership team also receives comprehensive reports on security incidents, threat intelligence, and vulnerability assessments from our cybersecurity team. Our cybersecurity leadership team is made up of highly experienced professionals with an extensive background in information security, risk management, and incident response. This background includes more than 50 years of collective experience in infrastructure, cybersecurity and telecommunications.
Biggest changeOur cybersecurity leadership team also receives comprehensive reports on security incidents, threat intelligence, and vulnerability assessments from our cybersecurity team.
Despite the implementation of our cybersecurity programs, our security measures cannot guarantee that a significant cyberattack will not occur. A successful attack on our IT systems or those of our vendors could have significant consequences to the business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security.
Despite the implementation of our cybersecurity programs, our security measures cannot guarantee that a significant cyberattack will not occur. A successful attack on our IT systems or those of our vendors could have significant consequences to our business. While we devote resources to our security measures to protect our systems and information, these measures cannot provide absolute security.
Additionally, we endeavor to include cybersecurity requirements in our contracts with these providers, including adherence to specific security practices and protocols. 67 Table of Contents Index to Financial Statements The above cybersecurity risk management processes are integrated into our overall risk management program. Cybersecurity threats are understood to be dynamic and to intersect with various other enterprise risks.
Additionally, we endeavor to include cybersecurity requirements in our contracts with these providers, including adherence to specific security practices and protocols. 66 Table of Contents Index to Financial Statements The above cybersecurity risk management processes are integrated into our overall risk management program. Cybersecurity threats are understood to be dynamic and to intersect with various other enterprise risks.
Item 1C. Cybersecurity Description of Cybersecurity Risk Management and Strategy To assess, identify and manage material cybersecurity risks, we have endeavored to implement policies, standards and technical controls with the aim of protecting our information and operations systems (collectively, “IT systems”).
Item 1C. Cybersecurity Description of Cybersecurity Risk Management and Strategy To assess, identify and manage material cybersecurity risks, we have endeavored to implement policies, standards and technical controls with the aim of protecting our information technology (“IT”) and operational technology (“OT”) systems (collectively, our “IT systems”).
Our cybersecurity leadership team also includes our Director, Technology Risk and Cybersecurity, our Senior Director, Strategic Planning, our Senior Director, North American Solution Delivery and our Senior Director, Enterprise Technology. The Board receives quarterly updates on material security incidents (if applicable), detection, monitoring, security culture scores, and other key initiatives and notable events from our cybersecurity leadership team.
Our cybersecurity leadership team also includes our Senior Director, Enterprise Technology, our Director, Cybersecurity and Technology Risk, and other senior leaders from our Information Services team. The Board receives quarterly updates on material security incidents (if applicable), detection, monitoring, and other key initiatives and notable events from our Vice President of Information Services – North America.
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Our cybersecurity leadership team is made up of highly experienced professionals with extensive backgrounds in information security, risk management, and incident response, including our Vice President of Information Services – North America, our Senior Director, Enterprise Technology and our Director, Cybersecurity and Technology Risk.
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Our Vice President of Information Services – North America has been with Plains for over 15 years and has over 25 years’ experience in technology infrastructure and security including senior management level oversight of cybersecurity for organizations in both the health care and oil and gas industries.
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Our Senior Director, Enterprise Technology reports to the Vice President, Information Services – North America and has accountability for core enterprise technology platforms, including hosting, networks, data platforms, and cybersecurity programs. This individual has over 20 years of experience in the information services industry, including experience with cyber incident detection and response.
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The Director, Cybersecurity and Technology Risk has responsibility for oversight of cybersecurity strategy across IT and OT environments, implementation of programs aligned with recognized frameworks, and implementation of key security controls.
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This individual has more than 20 years of experience in enterprise cybersecurity, OT security, and critical infrastructure risk management at publicly traded companies and holds multiple industry-recognized certifications in information security, audit, privacy, and enterprise IT governance.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information required by this item is included in Note 18 to our Consolidated Financial Statements, and is incorporated herein by reference thereto. Item 4. Mine Safety Disclosures Not applicable. 68 Table of Contents Index to Financial Statements PART II
Biggest changeItem 3. Legal Proceedings The information required by this item is included in Note 19 to our Consolidated Financial Statements, and is incorporated herein by reference thereto. Item 4. Mine Safety Disclosures Not applicable. 67 Table of Contents Index to Financial Statements PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes that $100 was invested in our Class A shares and each comparison index beginning on December 31, 2019 and that all distributions were reinvested on a quarterly basis. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 PAGP $ 100.00 $ 48.96 $ 63.11 $ 83.11 $ 114.79 $ 142.02 S&P 500 $ 100.00 $ 155.68 $ 200.37 $ 164.08 $ 207.21 $ 259.05 AMNA $ 100.00 $ 95.06 $ 131.58 $ 159.92 $ 182.34 $ 263.52 69 Table of Contents Index to Financial Statements This information shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C under the Exchange Act, other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.
Biggest changeThe graph assumes that $100 was invested in our Class A shares and each comparison index beginning on December 31, 2020 and that all distributions were reinvested on a quarterly basis. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 PAGP $ 100.00 $ 128.90 $ 169.74 $ 234.44 $ 290.07 $ 327.17 S&P 500 $ 100.00 $ 128.68 $ 105.36 $ 133.03 $ 166.28 $ 195.98 AMNA $ 100.00 $ 138.42 $ 168.22 $ 191.80 $ 277.21 $ 291.01 68 Table of Contents Index to Financial Statements This information shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C under the Exchange Act, other than as provided in Item 201(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.
See Note 17 to our Consolidated Financial Statements for additional information regarding our equity-indexed compensation plans. Our Class B shares and Class C shares are not listed or traded on any stock exchange.
See Note 18 to our Consolidated Financial Statements for additional information regarding our equity-indexed compensation plans. Our Class B shares and Class C shares are not listed or traded on any stock exchange.
The following table presents cash distributions per Class A share pertaining to the quarter presented, which were declared and paid in the following calendar quarter (see the “Cash Distribution Policy” section below for a discussion of our policy regarding distribution payments): First Quarter Second Quarter Third Quarter Fourth Quarter 2024 $ 0.3175 $ 0.3175 $ 0.3175 $ 0.3800 2023 $ 0.2675 $ 0.2675 $ 0.2675 $ 0.3175 Our Class A shares are also used as a form of compensation to our directors.
The following table presents cash distributions per Class A share pertaining to the quarter presented, which were declared and paid in the following calendar quarter (see the “Cash Distribution Policy” section below for a discussion of our policy regarding distribution payments): First Quarter Second Quarter Third Quarter Fourth Quarter 2025 $ 0.3800 $ 0.3800 $ 0.3800 $ 0.4175 2024 $ 0.3175 $ 0.3175 $ 0.3175 $ 0.3800 Our Class A shares are also used as a form of compensation to our directors.
Our principal source of cash flow is derived from our indirect investment in PAA. As of December 31, 2024, we owned approximately 197.5 million AAP units, which represented an approximate 85% limited partner interest in AAP. AAP currently receives all of its cash flows from its ownership of PAA common units.
Our principal source of cash flow is derived from our indirect investment in PAA. As of December 31, 2025, we owned approximately 197.9 million AAP units, which represented an approximate 85% limited partner interest in AAP. AAP currently receives all of its cash flows from its ownership of PAA common units.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreements, Commercial Paper Program and Indentures.” Our general partner owns a non-economic general partner interest in us, which does not entitle it to receive cash distributions. Item 6. Reserved
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreements, Commercial Paper Program, Term Loan and Indentures.” Our general partner owns a non-economic general partner interest in us, which does not entitle it to receive cash distributions.
Therefore, our cash flow and resulting ability to make distributions is dependent upon the ability of PAA to make distributions to AAP in respect of the common units AAP owns. As of December 31, 2024, AAP owned approximately 232.9 million PAA common units.
Therefore, our cash flow and resulting ability to make distributions is dependent upon the ability of PAA to make distributions to AAP in respect of the common units AAP owns. As of December 31, 2025, AAP owned approximately 233.0 million PAA common units.
Item 5. Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information, Holders and Distributions Our Class A shares are listed and traded on Nasdaq under the symbol “PAGP.” As of February 14, 2025, there were 197,743,624 Class A shares outstanding and approximately 85,000 record holders and beneficial owners (held in street name).
Item 5. Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information, Holders and Distributions Our Class A shares are listed and traded on Nasdaq under the symbol “PAGP.” As of February 20, 2026, there were 197,904,124 Class A shares outstanding and approximately 99,800 record holders and beneficial owners (held in street name).
Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Cash Distribution Policy Our partnership agreement requires that, within 55 days following the end of each quarter, we distribute all of our available cash to Class A shareholders of record on the applicable record date.
Cash Distribution Policy Our partnership agreement requires that, within 55 days following the end of each quarter, we distribute all of our available cash to Class A shareholders of record on the applicable record date.
Added
Recent Sales of Unregistered Securities In connection with our IPO and related transactions, the former owners of Plains All American GP LLC (the “Legacy Owners”) acquired the following interests (collectively, the “Stapled Interests”): (i) Class A units of AAP (“AAP units”) representing an economic limited partner interest in AAP; (ii) general partner units representing a non-economic membership interest in our general partner; and (iii) Class B shares representing a non-economic limited partner interest in us.
Added
The Legacy Owners and any permitted transferees of their Stapled Interests have the right to exchange (the “Exchange Right”) all or a portion of such Stapled Interests for an equivalent number of Class A shares. In connection with the exercise of the Exchange Right, the Stapled Interests are transferred to us and the applicable Class B shares are canceled.
Added
Although we issue one Class A share for each Stapled Interest that is exchanged, we also receive one AAP unit and one general partner unit. As a result, the exercise by Legacy Owners of the Exchange Right is not dilutive.
Added
During the three months ended December 31, 2025, certain Legacy Owners or their permitted transferees exercised the Exchange Right, which resulted in the issuance of 16,000 Class A shares.
Added
The issuance of Class A shares in connection with the exercise of the Exchange Right was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

109 edited+47 added−47 removed70 unchanged
Biggest changeVariations in our operating results are also caused by changes in volumes, prices, exchange rates, mechanical interruptions, acquisitions, divestitures, investment capital projects and numerous other factors as discussed, as applicable, in “—Analysis of Operating Segments.” 76 Table of Contents Index to Financial Statements The following table sets forth the reconciliation of the non-GAAP financial performance measures Adjusted EBITDA and Adjusted EBITDA attributable to PAA from Net Income (in millions): Year Ended December 31, Variance 2024 2023 $ % Net income $ 1,070 $ 1,425 $ (355) (25) % Interest expense, net of certain items (1) 382 386 (4) (1) % Income tax expense 204 189 15 8 % Depreciation and amortization 1,026 1,051 (25) (2) % (Gains)/losses on asset sales, asset impairments and other, net 160 (152) 312 205 % Gain on investments in unconsolidated entities, net (15) (28) 13 46 % Depreciation and amortization of unconsolidated entities (2) 84 87 (3) (3) % Unallocated general and administrative expenses (3) 6 6 — — % Selected Items Impacting Comparability: Derivative activities and inventory valuation adjustments 85 159 (74) ** Long-term inventory costing adjustments (9) 35 (44) ** Deficiencies under minimum volume commitments, net (31) 12 (43) ** Equity-indexed compensation expense 36 36 — ** Foreign currency revaluation (27) 24 (51) ** Line 901 incident 345 10 335 ** Transaction-related expenses — 1 (1) ** Selected Items Impacting Comparability - Segment Adjusted EBITDA (4) 399 277 122 ** Mark-to-market adjustment of Preferred Distribution Rate Reset Option embedded derivative (5) — (58) 58 ** Foreign currency revaluation (6) 10 (16) 26 ** Selected Items Impacting Comparability - Adjusted EBITDA (6) 409 203 206 ** Adjusted EBITDA (7) $ 3,326 $ 3,167 $ 159 5 % Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures (8) (547) (456) (91) (20) % Adjusted EBITDA attributable to PAA $ 2,779 $ 2,711 $ 68 3 % ** Indicates that variance as a percentage is not meaningful.
Biggest changeIn addition, as the potential sale of the Canadian NGL Business is not anticipated to close until around the end of the first quarter of 2026, management continues to view the Canadian NGL Business as a component of our overall company performance and ability to fund distributions to our unitholders in the near term. 76 Table of Contents Index to Financial Statements The following table sets forth the reconciliation of the non-GAAP financial performance measures Adjusted EBITDA and Adjusted EBITDA attributable to PAA from Net Income (in millions): Year Ended December 31, Variance 2025 2024 $ % Net income (1) $ 1,686 $ 1,070 $ 616 58 % Interest expense, net of certain items 467 382 85 22 % Income tax expense from continuing operations 92 124 (32) (26) % Income tax expense from discontinued operations (2) 139 80 59 74 % Depreciation and amortization from continuing operations 953 901 52 6 % Depreciation and amortization from discontinued operations (2) 57 125 (68) (54) % (Gains)/losses on asset sales, asset impairments and other, net from continuing operations (54) 159 (213) (134) % Losses on asset sales, asset impairments and other, net from discontinued operations (2) 21 1 20 ** Gain on investments in unconsolidated entities, net (31) (15) (16) (107) % Depreciation and amortization of unconsolidated entities (3) 84 84 — — % Unallocated general and administrative expenses (4) 6 6 — — % Selected Items Impacting Comparability (1) : Derivative activities and inventory valuation adjustments (108) 85 (193) ** Long-term inventory costing adjustments 48 (9) 57 ** Deficiencies under minimum volume commitments, net (38) (31) (7) ** Rail fleet amortization expense related to discontinued operations (5) (18) — (18) ** Equity-indexed compensation expense 37 36 1 ** Foreign currency revaluation 15 (27) 42 ** Line 901 incident — 345 (345) ** Transaction-related expenses 17 — 17 ** Selected Items Impacting Comparability - Segment Adjusted EBITDA (1) (6) (47) 399 (446) ** Foreign currency revaluation (7) 1 10 (9) ** Selected Items Impacting Comparability - Adjusted EBITDA (1) (8) (46) 409 (455) ** Adjusted EBITDA (1) (8) $ 3,374 $ 3,326 $ 48 1 % Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures (9) (541) (547) 6 1 % Adjusted EBITDA attributable to PAA (1) $ 2,833 $ 2,779 $ 54 2 % ** Indicates that variance as a percentage is not meaningful.
These non-GAAP financial performance measures may exclude, for example, (i) charges for obligations that are expected to be settled with the issuance of equity instruments, (ii) gains and losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), gains and losses on derivatives that are either related to investing activities (such as the purchase of linefill) or purchases of long-term inventory, and inventory valuation adjustments, as applicable, (iii) long-term inventory costing adjustments, (iv) items that are not indicative of our core operating results and/or (v) other items that we believe should be excluded in understanding our core operating performance.
These non-GAAP financial performance measures may exclude, for example, (i) charges for obligations that are expected to be settled with the issuance of equity instruments, (ii) gains and losses on derivative instruments that are related to underlying activities in another period (or the reversal of such adjustments from a prior period), gains and losses on derivatives that are either related to investing activities (such as the purchase of linefill) or purchases of long-term inventory, and inventory valuation adjustments, as applicable, (iii) long-term inventory costing adjustments, (iv) items that are not indicative of our operating results and/or (v) other items that we believe should be excluded in understanding our operating performance.
Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used to supplement related GAAP financial measures, (i) provide additional information about our core operating performance, (ii) provide investors with the same financial analytical framework upon which management bases financial, operational, compensation and planning/budgeting decisions and (iii) present measures that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations.
Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used to supplement related GAAP financial measures, (i) provide additional information about our operating performance, (ii) provide investors with the same financial analytical framework upon which management bases financial, operational, compensation and planning/budgeting decisions and (iii) present measures that investors, rating agencies and debt holders have indicated are useful in assessing us and our results of operations.
As one of the largest crude oil midstream service providers in North America, PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada.
As one of the largest crude oil midstream service providers in North America, PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada.
See Item 1A. “Risk Factors” for further discussion regarding risks that may impact our liquidity and capital resources. Credit Agreements, Commercial Paper Program and Indentures PAA has three primary credit arrangements, which we use to meet our short-term cash needs.
See Item 1A. “Risk Factors” for further discussion regarding risks that may impact our liquidity and capital resources. Credit Agreements, Commercial Paper Program, Term Loan and Indentures PAA has three primary credit arrangements, which we use to meet our short-term cash needs.
Revenues and Purchases Fluctuations in our consolidated revenues and purchases and related costs are primarily associated with our merchant activities and are generally explained by changes in commodity prices and the impact of gains and losses related to derivative instruments used to manage our commodity price exposure.
Revenues and Purchases Fluctuations in our revenues and purchases and related costs are primarily associated with our merchant activities and are generally explained by changes in commodity prices and the impact of gains and losses related to derivative instruments used to manage our commodity price exposure.
As of December 31, 2024, noncontrolling interests in our subsidiaries consisted of (i) limited partner interests in PAA including a 70% interest in PAA’s common units and PAA’s Series A preferred units combined and 100% of PAA’s Series B preferred units, (ii) an approximate 15% limited partner interest in AAP, (iii) a 35% interest in the Permian JV, (iv) a 30% interest in Cactus II and (v) a 33% interest in Red River.
As of December 31, 2025, noncontrolling interests in our subsidiaries consisted of (i) limited partner interests in PAA including a 70% interest in PAA’s common units and PAA’s Series A preferred units combined and 100% of PAA’s Series B preferred units, (ii) an approximate 15% limited partner interest in AAP, (iii) a 35% interest in the Permian JV, (iv) a 30% interest in Cactus II and (v) a 33% interest in Red River.
Gains/(Losses) on Asset Sales, Asset Impairments and Other, Net The net loss on asset sales and asset impairments for the year ended December 31, 2024 was primarily due to non-cash charges related to the write-down of certain of our long-lived U.S. terminal assets included in our NGL segment due to asset impairments and accelerated depreciation in the fourth quarter of 2024.
The net loss on asset sales, asset impairments and other, net for the year ended December 31, 2024 was primarily due to non-cash charges related to the write-down of certain of our long-lived U.S. terminal assets included in our NGL segment due to asset impairments and accelerated depreciation in the fourth quarter of 2024.
PAA has filed with the SEC a universal shelf registration statement that, subject to effectiveness at the time of use, allows PAA to issue up to a specified amount of debt or equity securities (“PAA Traditional Shelf”), under which PAA had approximately $1.1 billion of unsold securities available at December 31, 2024.
PAA has filed with the SEC a universal shelf registration statement that, subject to effectiveness at the time of use, allows PAA to issue up to a specified amount of debt or equity securities (“PAA Traditional Shelf”), under which PAA had approximately $1.1 billion of unsold securities available at December 31, 2025.
Adjusted EBITDA and Adjusted EBITDA attributable to PAA are reconciled to Net Income, the most directly comparable measures as reported in accordance with GAAP, and should be viewed in addition to, and not in lieu of, our Consolidated Financial Statements and accompanying notes. 75 Table of Contents Index to Financial Statements Non-GAAP Financial Performance Measures Adjusted EBITDA is defined as earnings before (i) interest expense, (ii) income tax (expense)/benefit, (iii) depreciation and amortization (including our proportionate share of depreciation and amortization, including write-downs related to cancelled projects and impairments, of unconsolidated entities), (iv) gains and losses on asset sales, asset impairments and other, net and (v) gains on investments in unconsolidated entities, net, and adjusted for (vi) certain selected items impacting comparability.
Adjusted EBITDA and Adjusted EBITDA attributable to PAA are reconciled to Net Income, the most directly comparable measures as reported in accordance with GAAP, and should be viewed in addition to, and not in lieu of, our Consolidated Financial Statements and accompanying notes. 75 Table of Contents Index to Financial Statements Non-GAAP Financial Performance Measures Adjusted EBITDA is defined as earnings from continuing operations and discontinued operations before (i) interest expense, (ii) income tax (expense)/benefit from continuing operations and discontinued operations, (iii) depreciation and amortization (including our proportionate share of depreciation and amortization, including write-downs related to cancelled projects and impairments, of unconsolidated entities) from continuing operations and discontinued operations, (iv) gains and losses on asset sales, asset impairments and other, net from continuing operations and discontinued operations and (v) gains on investments in unconsolidated entities, net, and (vi) adjusted for certain selected items impacting comparability.
Our estimates for contingent liability accruals are increased or decreased as additional information is obtained or resolution is achieved. A hypothetical variance of 5% in our aggregate estimate for the accruals and contingent liabilities discussed above would have an impact on earnings of up to approximately $13 million.
Our estimates for contingent liability accruals are increased or decreased as additional information is obtained or resolution is achieved. A hypothetical variance of 5% in our aggregate estimate for the accruals and contingent liabilities discussed above would have an impact on earnings of up to approximately $9 million.
Additionally, we estimate the upcoming liquidation timing of the inventory. Changes in assumptions made as to the timing of a sale can materially impact net realizable value. During the years ended December 31, 2024, 2023 and 2022, we did not record any charges related to the valuation adjustment of our inventory.
Additionally, we estimate the upcoming liquidation timing of the inventory. Changes in assumptions made as to the timing of a sale can materially impact net realizable value. During the years ended December 31, 2025, 2024 and 2023, we did not record any charges related to the valuation adjustment of our inventory.
Uncertainties that impact these estimates include the costs associated with these activities and the timing of incurring such costs. A hypothetical variance of 5% in our aggregate estimate for the retirement obligations discussed above would have an impact on earnings of up to approximately $7 million.
Uncertainties that impact these estimates include the costs associated with these activities and the timing of incurring such costs. A hypothetical variance of 5% in our aggregate estimate for the retirement obligations discussed above would have an impact on earnings of up to approximately $6 million.
We have commodity derivatives and interest rate derivatives that are accounted for as assets and liabilities at fair value on our Consolidated Balance Sheets. The valuations of our derivatives that are exchange traded are based on market prices on the applicable exchange on the last day of the period.
We have commodity, interest rate and foreign currency derivatives that are accounted for as assets and liabilities at fair value on our Consolidated Balance Sheets. The valuations of our derivatives that are exchange traded are based on market prices on the applicable exchange on the last day of the period.
PAA used a portion of the net proceeds from its January 2025 senior notes offering to fund this repurchase. See Note 11 to our Consolidated Financial Statements for more information regarding PAA’s Series A preferred units.
PAA used a portion of the net proceeds from its January 2025 senior notes offering to fund this repurchase. See Note 12 to our Consolidated Financial Statements for more information regarding PAA’s Series A preferred units.
(3) Represents general and administrative expenses incremental to those of PAA, which are not allocated to our reporting segments in determining Segment Adjusted EBITDA and are excluded in the non-GAAP financial performance measures utilized by management.
(4) Represents general and administrative expenses incremental to those of PAA, which are not allocated to our reporting segments in determining Segment Adjusted EBITDA and are excluded in the non-GAAP financial performance measures utilized by management.
(6) During the periods presented, there were fluctuations in the value of CAD to USD, resulting in the realization of foreign exchange gains and losses on the settlement of foreign currency transactions as well as the revaluation of monetary assets and liabilities denominated in a foreign currency.
(7) During the periods presented, there were fluctuations in the value of CAD to USD, resulting in the realization of foreign exchange gains and losses on the settlement of foreign currency transactions as well as the revaluation of monetary assets and liabilities denominated in a foreign currency.
Therefore, our cash flow from operating activities may be impacted by the margin deposit requirements related to our derivative activities. See Note 12 to our Consolidated Financial Statements for a discussion regarding our derivatives and risk management activities.
Therefore, our cash flow from operating activities may be impacted by the margin deposit requirements related to our derivative activities. See Note 13 to our Consolidated Financial Statements for a discussion regarding our derivatives and risk management activities.
(4) Represents adjustments included in the performance measure utilized by our CODM in the evaluation of segment results. See Note 19 to our Consolidated Financial Statements for additional discussion of such adjustments.
(4) Represents adjustments included in the performance measure utilized by our CODM in the evaluation of segment results. See Note 20 to our Consolidated Financial Statements for additional discussion of such adjustments.
Executive Summary Company Overview We are a Delaware limited partnership formed in 2013 that has elected to be taxed as a corporation for United States federal income tax purposes. As of December 31, 2024, our sole cash-generating assets consisted of an approximate 85% limited partner interest in AAP through our ownership of approximately 197.5 million AAP units.
Executive Summary Company Overview We are a Delaware limited partnership formed in 2013 that has elected to be taxed as a corporation for United States federal income tax purposes. As of December 31, 2025, our sole cash-generating assets consisted of an approximate 85% limited partner interest in AAP through our ownership of approximately 197.9 million AAP units.
See “—Executive Summary— Market Overview and Outlook” and Note 6, Note 8 and Note 9 to our Consolidated Financial Statements for additional information. Inventory Valuations. Inventory, including long-term inventory, primarily consists of crude oil and NGL and is valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools.
See “—Executive Summary— Market Overview and Outlook” and Note 7, Note 9 and Note 10 to our Consolidated Financial Statements for additional information. Inventory Valuations. Inventory, including long-term inventory, primarily consists of crude oil and NGL and is valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools.
PAA did not conduct any offering under its Traditional Shelf during the year 2024. PAA also has access to a universal shelf registration statement (“PAA WKSI Shelf”), which provides it with the ability to offer and sell an unlimited amount of debt and equity securities, subject to market conditions and capital needs.
PAA did not conduct any offerings under its Traditional Shelf during the year 2025. PAA also has access to a universal shelf registration statement (“PAA WKSI Shelf”), which provides it with the ability to offer and sell an unlimited amount of debt and equity securities, subject to market conditions and capital needs.
See Item 7A. Quantitative and Qualitative Disclosures About Market Risk and Note 12 to our Consolidated Financial Statements for a discussion regarding our derivatives and risk management activities. Accruals and Contingent Liabilities. We record accruals or liabilities for, among other things, environmental remediation, potential legal claims or settlements and fees for legal services associated with loss contingencies, and bonuses.
Quantitative and Qualitative Disclosures About Market Risk and Note 13 to our Consolidated Financial Statements for a discussion regarding our derivatives and risk management activities. Accruals and Contingent Liabilities. We record accruals or liabilities for, among other things, environmental remediation, potential legal claims or settlements and fees for legal services associated with loss contingencies, and bonuses.
Net cash provided by operating activities for the years ended December 31, 2024 and 2023 was approximately $2.5 billion and $2.7 billion, respectively, and primarily resulted from earnings from our operations. Investing Activities Capital Expenditures In addition to our operating needs, we also use cash for our investment capital projects, maintenance capital activities and acquisition activities.
Net cash provided by operating activities from continuing operations for the years ended December 31, 2025 and 2024 was approximately $2.9 billion and $2.5 billion, respectively, and primarily resulted from earnings from our operations. Investing Activities Capital Expenditures In addition to our operating needs, we also use cash for our investment capital projects, maintenance capital activities and acquisition activities.
In addition, when we evaluate property and equipment and other long-lived assets for recoverability, it may also be necessary to review related depreciation estimates and methods. 91 Table of Contents Index to Financial Statements Investments in unconsolidated entities accounted for under the equity method of accounting are assessed for impairment when events or circumstances suggest that a decline in value may be other than temporary.
In addition, when we evaluate property and equipment and other long-lived assets for recoverability, it may also be necessary to review related depreciation estimates and methods. Investments in unconsolidated entities accounted for under the equity method of accounting are assessed for impairment when events or circumstances suggest that a decline in value may be other than temporary.
Consistent with the forecast from the EIA’s Short-Term Energy Outlook (as depicted in the chart above), we expect crude oil demand to continue to increase, driven largely by our view that hydrocarbon-based fuels are the most efficient fuels for the transportation of people and goods, and hydrocarbon-based products provide the building blocks for modern civilization such as fertilizers, plastics and cement.
As depicted in EIA’s Short-Term Energy Outlook (chart above), we expect crude oil demand to continue increasing, driven largely by our view that hydrocarbon-based fuels are the most efficient fuels for the transportation of people and goods, and hydrocarbon-based products provide the building blocks for modern civilization such as fertilizers, plastics and cement.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 28, 2025.
See Note 7 to our Consolidated Financial Statements for discussion of the methods, assumptions and estimates used in the determination of the fair value of the assets and liabilities acquired and identification of associated intangible assets. Fair Value of Derivatives.
See Note 8 to our Consolidated Financial Statements for discussion of the methods, assumptions and estimates used in the determination of the fair value of the assets and liabilities acquired and identification of associated intangible assets for these transactions. Fair Value of Derivatives.
PAA used the net proceeds from this offering of approximately $988 million, after deducting the underwriting discount and offering expenses, to (i) fund the acquisitions completed during the first quarter of 2025, (ii) fund the repurchase in January 2025 of 12.7 million PAA Series A preferred units, including accrued and unpaid distributions and (iii) repay outstanding borrowings under its credit facilities and commercial paper program, and, pending such uses, for general partnership purposes.
(5) PAA used the net proceeds from this offering to (i) fund the acquisitions completed during the first quarter of 2025, (ii) fund the repurchase in January 2025 of 12.7 million Series A preferred units, including accrued and unpaid distributions and (iii) repay outstanding borrowings under its credit facilities and commercial paper program, and pending such uses, for general partnership purposes.
The distribution was paid to Class A shareholders of record as of January 31, 2025, with respect to the quarter ended December 31, 2024. See Note 11 to our Consolidated Financial Statements for details of distributions paid during the three years ended December 31, 2024.
The distribution was paid to Class A shareholders of record as of January 30, 2026, with respect to the quarter ended December 31, 2025. See Note 12 to our Consolidated Financial Statements for details of distributions paid during the three years ended December 31, 2025.
See Note 19 to our Consolidated Financial Statements for a reconciliation of Segment Adjusted EBITDA to Net income attributable to PAGP. In connection with our merchant activities, our Crude Oil and NGL segments may enter into intersegment transactions for the purchase or sale of products, along with services such as the transportation, terminalling or storage of products.
See Note 20 to our Consolidated Financial Statements for a reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations, Net of Tax. In connection with our merchant activities, our Crude Oil and NGL segments may enter into intersegment transactions for the purchase or sale of products, along with services such as the transportation, terminalling or storage of products.
Less than 1% of total annual revenues are based on estimates derived from internal valuation models. 90 Table of Contents Index to Financial Statements Although the resolution of the uncertainties involved in these estimates has not historically had a material impact on our results of operations or financial condition, we cannot provide assurance that actual amounts will not vary significantly from estimated amounts.
Less than 1% of total annual revenues are based on estimates derived from internal valuation models. Although the resolution of the uncertainties involved in these estimates has not historically had a material impact on our results of operations or financial condition, we cannot provide assurance that actual amounts will not vary significantly from estimated amounts. See Item 7A.
The associated gains and losses are not integral to our results and were thus classified as a selected item impacting comparability. 77 Table of Contents Index to Financial Statements (7) “Other income/(expense), net” on our Consolidated Statements of Operations, adjusted for selected items impacting comparability (“Adjusted other income/(expense), net”) is included in Adjusted EBITDA and excluded from Segment Adjusted EBITDA.
The associated gains and losses are not integral to our results and were thus classified as a selected item impacting comparability. (8) “Other income, net” on our Consolidated Statements of Operations, adjusted for selected items impacting comparability (“Adjusted other income, net”) is included in Adjusted EBITDA and excluded from Segment Adjusted EBITDA.
(2) Available capacity under the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility was reduced by outstanding letters of credit issued under these facilities of less than $1 million and $17 million, respectively. (3) Excludes restricted cash of $1 million.
(2) Available capacity under the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility was reduced by outstanding letters of credit issued under these facilities of less than $1 million and $52 million, respectively.
Borrowings and Repayments Under Credit Arrangements During the year ended December 31, 2024, PAA had net repayments under its commercial paper program of $40 million.
During the year ended December 31, 2024, PAA had net repayments under its commercial paper program of $40 million.
AAP is a Delaware limited partnership that, as of December 31, 2024, directly owned a limited partner interest in PAA through its ownership of approximately 232.9 million PAA common units (approximately 30% of PAA’s total outstanding common units and Series A preferred units combined).
AAP is a Delaware limited partnership that, as of December 31, 2025, directly owned a limited partner interest in PAA through its ownership of approximately 233.0 million PAA common units (approximately 31% of PAA’s total outstanding common units and Series A preferred units combined).
Our discussion and analysis includes the following: 70 Table of Contents Index to Financial Statements • Executive Summary • Results of Operations • Liquidity and Capital Resources • Critical Accounting Policies and Estimates • Recent Accounting Pronouncements A comparative discussion of our 2023 to 2022 operating results and performance measures can be found in Item 7.
Our discussion and analysis includes the following: • Executive Summary • Results of Operations • Liquidity and Capital Resources • Critical Accounting Policies and Estimates • Recent Accounting Pronouncements A comparative discussion of our 2024 to 2023 operating results and performance measures can be found in Item 7.
“Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities—Cash Distribution Policy” for additional discussion regarding distributions. On February 14, 2025, we paid a quarterly distribution of $0.38 per Class A share ($1.52 per Class A share on an annualized basis).
“Market for Registrant’s Shares, Related Shareholder Matters and Issuer Purchases of Equity Securities—Cash Distribution Policy” for additional discussion regarding distributions. On February 13, 2026, we paid a quarterly distribution of $0.4175 per Class A share ($1.67 per Class A share on an annualized basis).
Segment Adjusted EBITDA Crude Oil Segment Adjusted EBITDA increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to higher tariff volumes on our pipelines, tariff escalations and contributions from acquisitions, partially offset by fewer market-based opportunities.
Segment Adjusted EBITDA Crude Oil Segment Adjusted EBITDA increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to higher tariff volumes on our pipelines, contributions from acquisitions and the benefit of tariff escalations, partially offset by fewer market-based opportunities and the impact from certain contract rates resetting to market.
The following is a more detailed discussion of the significant factors impacting Segment Adjusted EBITDA for the year ended December 31, 2024 compared to the year ended December 31, 2023. Net Revenues and Equity Earnings.
The following is a more detailed discussion of the significant factors impacting Segment Adjusted EBITDA for the periods indicated. Net Revenues and Equity Earnings. Our results increased for the year ended December 31, 2025 compared to the year ended December 31, 2024.
As of December 31, 2024, although we had a working capital deficit of $148 million, we had over $2.6 billion of liquidity available to meet our ongoing operating, investing and financing needs, subject to continued covenant compliance, as noted below (in millions): As of December 31, 2024 Availability under PAA senior unsecured revolving credit facility (1) (2) $ 1,350 Availability under PAA senior secured hedged inventory facility (1) (2) 1,333 Amounts outstanding under PAA commercial paper program (393) Subtotal 2,290 Cash and cash equivalents (3) 348 Total $ 2,638 82 Table of Contents Index to Financial Statements (1) Represents availability prior to giving effect to borrowings outstanding under the PAA commercial paper program, which reduce available capacity under the facilities.
As of December 31, 2025, although we had a working capital deficit of $198 million, we had over $2.0 billion of liquidity available to meet our ongoing operating, investing and financing needs, subject to continued covenant compliance, as noted below (in millions): 81 Table of Contents Index to Financial Statements As of December 31, 2025 Availability under PAA senior unsecured revolving credit facility (1) (2) $ 1,350 Availability under PAA senior secured hedged inventory facility (1) (2) 1,298 Amounts outstanding under PAA commercial paper program (970) Subtotal 1,678 Cash and cash equivalents 329 Total $ 2,007 (1) Represents availability prior to giving effect to borrowings outstanding under the PAA commercial paper program, which reduce available capacity under the facilities.
The credit agreements for PAA’s revolving credit facilities (which impact PAA’s ability to access its commercial paper program because they provide the financial backstop that supports PAA’s short-term credit ratings) and the indentures governing its senior notes contain cross-default provisions. A default under PAA’s credit agreements or indentures would permit the lenders to accelerate the maturity of the outstanding debt.
The credit agreements for PAA’s revolving credit facilities (which impact PAA’s ability to access its commercial paper program because they provide the financial backstop that supports PAA’s short-term credit ratings), the PAA term loan and the indentures governing its senior notes contain cross-default provisions.
Investment Capital Projects Our investment capital programs consist of investments in midstream infrastructure projects that build upon our core assets and operations. The majority of this investment capital consists of highly-contracted projects that complement our broader system capabilities and support the long-term needs of the upstream and downstream sectors of the industry value chain.
The majority of this investment capital consists of highly-contracted projects that complement our broader system capabilities and support the long-term needs of the upstream and downstream sectors of the industry value chain.
Common Equity Repurchase Program In November 2020, the board of directors of our general partner approved a $500 million common equity repurchase program (the “Program”) to be utilized as an additional method of returning capital to investors.
The offerings of PAA’s senior notes during 2025 were conducted under its WKSI Shelf. Common Equity Repurchase Program In November 2020, the board of directors of our general partner approved a $500 million common equity repurchase program (the “Program”) to be utilized as an additional method of returning capital to investors.
The remaining available capacity under the Program as of December 31, 2024 was $198 million. 87 Table of Contents Index to Financial Statements Preferred Unit Repurchase On January 31, 2025, PAA repurchased 12.7 million units, or 18%, of its outstanding Series A preferred units at the issue price of $26.25 per unit for a purchase price of approximately $333 million, plus accrued and unpaid distributions through January 30, 2025 of approximately $10 million.
Preferred Unit Repurchase On January 31, 2025, PAA repurchased approximately 12.7 million units, or 18%, of its outstanding Series A preferred units at the issue price of $26.25 per unit for a purchase price of approximately $333 million, plus accrued and unpaid distributions through January 30, 2025 of approximately $10 million.
See Note 19 to our Consolidated Financial Statements for additional discussion of such adjustments. 79 Table of Contents Index to Financial Statements (5) Average daily volumes in thousands of barrels per day calculated as the total volumes (attributable to our interest for assets owned by unconsolidated entities or through UJIs) for the year divided by the number of days in the year.
(5) Average daily volumes in thousands of barrels per day calculated as the total volumes (attributable to our interest for assets owned by unconsolidated entities or through UJIs) for the year divided by the number of days in the year.
The following table sets forth selected information regarding these entities as of December 31, 2024 (unaudited, dollars in millions): Entity Type of Operation Our Ownership Interest Total Entity Assets Total Cash and Restricted Cash BridgeTex Pipeline Company, LLC Crude Oil Pipeline 20% $ 755 $ 27 Capline Pipeline Company LLC Crude Oil Pipeline 54% $ 1,216 $ 43 Diamond Pipeline LLC Crude Oil Pipeline (1) 50% $ 858 $ 13 Eagle Ford Pipeline LLC Crude Oil Pipeline (1) 50% $ 765 $ 33 Eagle Ford Terminals Corpus Christi LLC Crude Oil Terminal and Dock (1) 50% $ 205 $ 5 Saddlehorn Pipeline Company, LLC Crude Oil Pipeline 40% $ 576 $ 18 White Cliffs Pipeline, L.L.C.
The following table sets forth selected information regarding these entities as of December 31, 2025 (unaudited, dollars in millions): Entity Type of Operation Our Ownership Interest Total Entity Assets Total Cash and Restricted Cash BridgeTex Pipeline Company, LLC Crude Oil Pipeline 40% $ 717 $ 36 Capline Pipeline Company LLC Crude Oil Pipeline 54% $ 1,171 $ 34 Diamond Pipeline LLC Crude Oil Pipeline (1) 50% $ 843 $ 14 Eagle Ford Pipeline LLC Crude Oil Pipeline (1) 50% $ 735 $ 15 Eagle Ford Terminals Corpus Christi LLC Crude Oil Terminal and Dock (1) 50% $ 200 $ 5 Saddlehorn Pipeline Company, LLC Crude Oil Pipeline 40% $ 562 $ 23 White Cliffs Pipeline, L.L.C.
During 2024 and 2023, PAA repaid the following senior unsecured notes in full (in millions): Year Description Repayment Date 2024 $750 million 3.60% PAA Senior Notes due November 2024 November 2024 (1) 2023 $700 million 3.85% PAA Senior Notes due October 2023 October 2023 (2) 2023 $400 million 2.85% PAA Senior Notes due January 2023 January 2023 (2) (1) PAA repaid these senior notes with proceeds from its 5.70% senior notes issued in June 2024, cash on hand. and borrowings under its commercial paper program.
During 2025 and 2024, PAA repaid the following senior unsecured notes in full (in millions): Repayment Date Description Maturity October 3, 2025 $1,000 million 4.65% PAA senior notes October 2025 (1) November 1, 2024 $750 million 3.60% PAA senior notes November 2024 (2) (1) PAA repaid these senior notes with a combination of proceeds from its senior notes issued in September 2025, cash on hand and borrowings under its commercial paper program.
The following table presents the range of the NYMEX Price over the last two years (in dollars per barrel): NYMEX Price During the Year Ended December 31, Low High Average 2024 $ 66 $ 87 $ 76 2023 $ 67 $ 94 $ 78 Product sales revenues and purchases increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to higher crude oil sales volumes.
The following table presents the range of the NYMEX Price over the last two years (in dollars per barrel): NYMEX Price During the Year Ended December 31, Low High Average 2025 $ 55 $ 80 $ 65 2024 $ 66 $ 87 $ 76 Product sales revenues (including the impact of derivative mark-to-market valuations) and purchases decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to lower commodity prices in 2025, partially offset by higher crude oil sales volumes in 2025.
Field Operating Costs See discussion of field operating costs in the “—Analysis of Operating Segments” section below.
See further discussion of net revenues (revenues less purchases and related costs) in the “—Analysis of Operating Segments” section below. Field Operating Costs See discussion of field operating costs in the “—Analysis of Operating Segments” section below.
Commitments See Note 10 to our Consolidated Financial Statements for information regarding our debt obligations and Note 18 for information regarding our leases and other commitments. 88 Table of Contents Index to Financial Statements Purchase Obligations In the ordinary course of doing business, we purchase crude oil and NGL from third parties under contracts, the majority of which range in term from thirty-day evergreen to five years, with a limited number of contracts with remaining terms extending up to 10 years.
Purchase Obligations In the ordinary course of doing business, we purchase crude oil from third parties under contracts, the majority of which range in term from thirty-day evergreen to five years, with a limited number of contracts with remaining terms extending up to 10 years.
Non-GAAP Financial Measures To supplement our financial information presented in accordance with GAAP, management uses additional measures known as “non-GAAP financial measures” in its evaluation of past performance and prospects for the future. The primary additional measures used by management are Adjusted EBITDA and Adjusted EBITDA attributable to PAA.
This favorable variance is partially offset by the impact of higher earnings at PAA on income attributable to PAGP. Non-GAAP Financial Measures To supplement our financial information presented in accordance with GAAP, management uses additional measures known as “non-GAAP financial measures” in its evaluation of past performance and prospects for the future.
(1) Represents “Interest expense, net” as reported on our Consolidated Statements of Operations. (2) We exclude our proportionate share of the depreciation and amortization expense (including write-downs related to cancelled projects and impairments) of unconsolidated entities when reviewing Adjusted EBITDA, similar to our consolidated assets.
(1) Includes results from continuing operations and discontinued operations. (2) See Note 3 to our Consolidated Financial Statements for additional information. (3) We exclude our proportionate share of the depreciation and amortization expense (including write-downs related to cancelled projects and impairments) of unconsolidated entities when reviewing Adjusted EBITDA, similar to our consolidated assets.
Income Tax (Expense)/Benefit The net unfavorable income tax variance for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to higher income tax expense in 2024 associated with Canadian withholding tax on dividends from our Canadian entities to other Plains entities driven by timing of dividend payments, including proceeds from asset divestitures, partially offset by the impact of lower earnings at PAA on income tax attributable to PAGP.
Income Tax Expense from Continuing Operations The net favorable income tax expense from continuing operations variance for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to higher income tax expense in 2024 associated with Canadian withholding tax on intercompany dividends from our Canadian entity driven by timing of dividend payments, including proceeds from asset divestitures.
Past experience has demonstrated that discussions and negotiations regarding a potential transaction can advance or terminate in a short period of time. Moreover, the closing of any transaction for which we have entered into a definitive agreement may be subject to customary and other closing conditions, which may not ultimately be satisfied or waived.
Moreover, the closing of any transaction for which we have entered into a definitive agreement may be subject to customary and other closing conditions, which may not ultimately be satisfied or waived.
We periodically evaluate property and equipment for impairment when events or circumstances indicate that the carrying value of these assets may not be recoverable. Any evaluation is highly dependent on the underlying assumptions of related cash flows. We consider the fair value estimate used to calculate impairment of property and equipment a critical accounting estimate.
Any evaluation is highly dependent on the underlying assumptions of related cash flows. We consider the fair value estimate used to calculate impairment of property and equipment a critical accounting estimate.
Our definition and calculation of certain non-GAAP financial measures may not be comparable to similarly-titled measures of other companies.
The primary additional measures used by management are Adjusted EBITDA and Adjusted EBITDA attributable to PAA. Our definition and calculation of certain non-GAAP financial measures may not be comparable to similarly-titled measures of other companies.
Cash Flow from Operating Activities The primary drivers of cash flow from operating activities are (i) the collection of amounts related to the sale of crude oil, NGL and other products, the transportation of crude oil and other products for a fee, and the provision of storage and terminalling services for a fee and (ii) the payment of amounts related to the purchase of crude oil, NGL and other products and other expenses, principally field operating costs, general and administrative expenses and interest expense.
Cash Flow from Operating Activities The primary drivers of cash flow from operating activities are (i) the collection of amounts related to the sale of crude oil, NGL and other products, the transportation of crude oil and other products for a fee, and the provision of storage and terminalling services for a fee and (ii) the payment of amounts related to the purchase of crude oil, NGL and other products and other expenses, principally field operating costs, general and administrative expenses and interest expense. 82 Table of Contents Index to Financial Statements Cash flow from operating activities can be materially impacted by the storage of crude oil in periods of a contango market, when the price of crude oil for future deliveries is higher than current prices.
The following table includes our best estimate of the amount and timing of these payments as of December 31, 2024 (in millions): 2025 2026 2027 2028 2029 2030 and Thereafter Total Crude oil, NGL and other purchases (1) $ 24,727 $ 20,369 $ 17,980 $ 15,049 $ 13,711 $ 26,360 $ 118,196 (1) Amounts are primarily based on estimated volumes and market prices based on average activity during December 2024.
The following table includes our best estimate of the amount and timing of these payments as of December 31, 2025 (in millions): 2026 2027 2028 2029 2030 2031 and Thereafter Total Crude oil and other purchases (1) $ 21,085 $ 17,286 $ 14,974 $ 13,799 $ 11,748 $ 22,806 $ 101,698 (1) Amounts are primarily based on estimated volumes and market prices based on average activity during December 2025.
(8) Reflects amounts attributable to noncontrolling interests in the Permian JV, Cactus II and Red River. Analysis of Operating Segments We manage our operations through two operating segments: Crude Oil and NGL.
(9) Reflects amounts attributable to noncontrolling interests in the Permian JV, Cactus II and Red River. Analysis of Operating Segments We manage our operations through two operating segments: Crude Oil and NGL. Our Chief Operating Decision Maker (“CODM”) (our Chief Executive Officer) evaluates segment performance based on measures including Segment Adjusted EBITDA.
At December 31, 2024 and 2023, we had outstanding letters of credit of approximately $90 million and $205 million, respectively. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements as defined by Item 303 of Regulation S-K. Investments in Unconsolidated Entities We have invested in entities that are not consolidated in our financial statements.
At December 31, 2025 and 2024, we had outstanding letters of credit of approximately $95 million and $90 million, respectively. 88 Table of Contents Index to Financial Statements Off-Balance Sheet Arrangements We have no off-balance sheet arrangements as defined by Item 303 of Regulation S-K.
Prior to such repayment, PAA used a portion of the net proceeds from the offering to repay outstanding borrowings under its commercial paper program and for general partnership purposes. In January 2025, PAA also completed the offering of $1 billion, 5.95% senior notes due June 2035 at a public offering price of 99.761%.
Prior to such repayment, PAA used a portion of the net proceeds from the offering to repay outstanding borrowings under its commercial paper program and for general partnership purposes. Repayments of PAA Senior Notes.
Distributions to PAA’s Series B preferred unitholders. Holders of PAA’s Series B preferred units are entitled to receive, when, as and if declared by PAA’s general partner out of legally available funds for such purpose, cumulative cash distributions, as applicable.
Holders of PAA’s Series B preferred units are entitled to receive, when, as and if declared by PAA’s general partner out of legally available funds for such purpose, cumulative cash distributions, as applicable. Distributions on the Series B preferred units accumulate based on the applicable three-month SOFR, plus a credit spread adjustment of 0.26161%, plus 4.11% per annum.
“Risk Factors—Risks Related to PAA’s Business—Acquisitions and divestitures involve risks that may adversely affect PAA’s business.” 85 Table of Contents Index to Financial Statements Financing Activities Our financing activities primarily relate to funding investment capital projects, acquisitions and refinancing of debt maturities, as well as short-term working capital (including borrowings for NYMEX and ICE margin deposits) and hedged inventory borrowings related to our NGL business and contango market activities.
Financing Activities Our financing activities primarily relate to funding investment capital projects, acquisitions and refinancing of debt maturities, as well as short-term working capital (including borrowings for NYMEX and ICE margin deposits) and hedged inventory borrowings related to our NGL business and contango market activities, and the payment of distributions to our shareholders and noncontrolling interests.
(2) Includes projects at our St. James and Fort Saskatchewan terminals. Projected 2025 Capital Expenditures. Total investment capital for the year ending December 31, 2025 is currently projected to be approximately $500 million ($400 million net to our interest). Approximately half of our projected investment capital expenditures are expected to be invested in the Permian JV assets.
Projected 2026 Capital Expenditures. Total investment capital for the year ending December 31, 2026 is currently projected to be approximately $440 million ($350 million net to our interest), which includes approximately $15 million related to discontinued operations. Approximately half of our projected investment capital expenditures are expected to be invested in the Permian JV assets.
None of these entities had debt outstanding as of December 31, 2024. We may elect at any time to make additional capital contributions to any of these entities.
Investments in Unconsolidated Entities We have invested in entities that are not consolidated in our financial statements. None of these entities had debt outstanding as of December 31, 2025. We may elect at any time to make additional capital contributions to any of these entities.
Although the resolution of these uncertainties has not historically had a material impact on our results of operations or financial condition, we cannot provide assurance that actual amounts will not vary significantly from estimated amounts.
Although the resolution of these uncertainties has not historically had a material impact on our results of operations or financial condition, we cannot provide assurance that actual amounts will not vary significantly from estimated amounts. 90 Table of Contents Index to Financial Statements See Note 7 and Note 10 to our Consolidated Financial Statements for additional information on our property and equipment, intangible assets and depreciation and amortization expense.
Crude Oil Segment Our Crude Oil segment operations generally consist of gathering and transporting crude oil using pipelines (including gathering systems), trucks and, at times, on barges or railcars, in addition to providing terminalling, storage and other related services utilizing our integrated assets across the United States and Canada.
Revenues and expenses from our Canadian based subsidiaries, which use CAD as their functional currency, are translated at the prevailing average exchange rates for the month. 78 Table of Contents Index to Financial Statements Crude Oil Segment Our Crude Oil segment operations generally consist of gathering and transporting crude oil using pipelines (including gathering systems), trucks and, at times, on barges or railcars, in addition to providing terminalling, storage and other related services utilizing our integrated assets across the United States and Canada.
Similarly, the level of NGL and other product inventory stored and held for resale at period end affects our cash flow from operating activities. 83 Table of Contents Index to Financial Statements In periods when the market is not in contango, we typically sell our crude oil during the same month in which we purchase it and we do not rely on borrowings under the PAA credit facilities or commercial paper program to pay for the crude oil.
In periods when the market is not in contango, we typically sell our crude oil during the same month in which we purchase it and we do not rely on borrowings under the PAA credit facilities or commercial paper program to pay for the crude oil.
See Note 18 to our Consolidated Financial Statements for further discussion regarding the Line 901 incident and our related insurance receivable. Recent Accounting Pronouncements See Note 2 to our Consolidated Financial Statements for information regarding the effect of recent accounting pronouncements on our Consolidated Financial Statements.
See Note 6 to our Consolidated Financial Statements for further discussion regarding inventory. 91 Table of Contents Index to Financial Statements Recent Accounting Pronouncements See Note 2 to our Consolidated Financial Statements for information regarding the effect of recent accounting pronouncements on our Consolidated Financial Statements.
Maintenance Capital Maintenance capital consists of capital expenditures for the replacement and/or refurbishment of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets.
This was partially offset by higher expenses in the 2025 period resulting from (i) acquisitions, (ii) higher volumes and (iii) property taxes. Maintenance Capital Maintenance capital consists of capital expenditures for the replacement and/or refurbishment of partially or fully depreciated assets in order to maintain the operating and/or earnings capacity of our existing assets.
North America has proven to be an essential and reliable source of crude oil and NGL production growth for the global market. This is driven by the lifting of the U.S. crude oil export ban, infrastructure debottlenecking in both the U.S. and Canada, and world-class geological formations unlocked through technological improvements and techniques.
This is driven by the lifting of the U.S. crude oil export ban, infrastructure debottlenecking in both the U.S. and Canada, and world-class geological formations unlocked through technological improvements and techniques. The Permian Basin continues to be one of the most prolific basins in the world and was the predominant driver of U.S. production growth in 2025.
Crude Oil Pipeline 36% $ 341 $ 1 Wink to Webster Pipeline LLC Crude Oil Pipeline 17% $ 2,288 $ 68 Other investments $ 467 $ 25 (1) We serve as operator of the asset. 89 Table of Contents Index to Financial Statements Critical Accounting Policies and Estimates The preparation of financial statements in conformity with GAAP and rules and regulations of the SEC requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of the financial statements.
Critical Accounting Policies and Estimates The preparation of financial statements in conformity with GAAP and rules and regulations of the SEC requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of the financial statements.
Conversely, cash flow from operating activities increases during the period in which we collect the cash from the sale of the stored crude oil.
Conversely, cash flow from operating activities increases during the period in which we collect the cash from the sale of the stored crude oil. Similarly, the level of NGL and other product inventory stored and held for resale at period end affects our cash flow from operating activities.
The segment results also include the direct fixed and variable field costs of operating the crude oil assets, as well as an allocation of indirect operating costs. 78 Table of Contents Index to Financial Statements The following tables set forth our operating results from our Crude Oil segment: Operating Results (1) (in millions) Year Ended December 31, Variance 2024 2023 $ % Revenues $ 48,720 $ 47,174 $ 1,546 3 % Purchases and related costs (2) (45,033) (43,805) (1,228) (3) % Field operating costs (2) (1,440) (1,053) (387) (37) % Segment general and administrative expenses (2) (3) (298) (271) (27) (10) % Equity earnings in unconsolidated entities 452 369 83 22 % Other segment items (4) : Depreciation and amortization of unconsolidated entities 84 87 (3) (3) % Derivative activities and inventory valuation adjustments 5 17 (12) ** Long-term inventory costing adjustments 1 22 (21) ** Deficiencies under minimum volume commitments, net (31) 12 (43) ** Equity-indexed compensation expense 36 35 1 ** Foreign currency revaluation (22) 19 (41) ** Line 901 incident 345 10 335 ** Transaction-related expenses — 1 (1) ** Segment amounts attributable to noncontrolling interests in consolidated joint ventures (543) (454) (89) ** Segment Adjusted EBITDA $ 2,276 $ 2,163 $ 113 5 % Maintenance capital expenditures $ 183 $ 145 $ 38 26 % Average Volumes Year Ended December 31, Variance 2024 2023 Volumes % Crude oil pipeline tariff (by region) (5) Permian Basin (6) 6,731 6,356 375 6 % Rocky Mountain (6) 474 372 102 27 % Other (6) 1,729 1,732 (3) — % Total crude oil pipeline tariff 8,934 8,460 474 6 % Commercial crude oil storage capacity (6) (7) 72 72 — — % Crude oil lease gathering purchases (5) (8) 1,586 1,452 134 9 % ** Indicates that variance as a percentage is not meaningful.
The following tables set forth our operating results from our Crude Oil segment: Operating Results (1) (in millions) Year Ended December 31, Variance 2025 2024 $ % Revenues $ 44,131 $ 48,720 $ (4,589) (9) % Purchases and related costs (2) (40,323) (45,033) 4,710 10 % Field operating costs (2) (1,127) (1,440) 313 22 % Segment general and administrative expenses (2) (3) (314) (298) (16) (5) % Equity earnings in unconsolidated entities 382 452 (70) (15) % Other segment items (4) : Depreciation and amortization of unconsolidated entities 84 84 — — % Derivative activities and inventory valuation adjustments (23) 5 (28) ** Long-term inventory costing adjustments 45 1 44 ** Deficiencies under minimum volume commitments, net (38) (31) (7) ** Equity-indexed compensation expense 37 36 1 ** Foreign currency revaluation 12 (22) 34 ** Line 901 incident — 345 (345) ** Transaction-related expenses 17 — 17 ** Segment amounts attributable to noncontrolling interests in consolidated joint ventures (539) (543) 4 ** Segment Adjusted EBITDA $ 2,344 $ 2,276 $ 68 3 % Maintenance capital expenditures $ 153 $ 183 $ (30) (16) % Average Volumes Year Ended December 31, Variance 2025 2024 Volumes % Crude oil pipeline tariff (by region) (5) (6) Permian Basin 7,333 6,731 602 9 % South Texas / Eagle Ford 521 403 118 29 % Mid-Continent 518 506 12 2 % Other 1,308 1,294 14 1 % Total crude oil pipeline tariff 9,680 8,934 746 8 % 79 Table of Contents Index to Financial Statements ** Indicates that variance as a percentage is not meaningful.
During 2024, PAA issued senior unsecured notes as summarized in the table below (in millions): Year Description Maturity Face Value Gross Proceeds (1) Net Proceeds (2) 2024 5.70% PAA Senior Notes issued at 99.953% of face value September 2034 $ 650 $ 650 $ 643 (3) (1) Face value of notes less the applicable premium or discount (before deducting for initial purchaser discounts, commissions and offering expenses).
During 2025 and 2024, PAA issued senior unsecured notes as summarized in the table below (in millions): Issuance Date Description Maturity Face Value Gross Proceeds (1) Net Proceeds (2) November 14, 2025 4.70% PAA senior notes issued at 99.872% of face value January 2031 $ 300 $ 300 $ 297 (3) November 14, 2025 5.60% PAA senior notes issued at 100.518% of face value January 2036 $ 450 $ 452 $ 448 (3) September 8, 2025 4.70% PAA senior notes issued at 99.865% of face value January 2031 $ 700 $ 699 $ 693 (4) September 8, 2025 5.60% PAA senior notes issued at 99.798% of face value January 2036 $ 550 $ 549 $ 544 (4) January 15, 2025 5.95% PAA senior notes issued at 99.761% of face value June 2035 $ 1,000 $ 998 $ 988 (5) June 27, 2024 5.70% PAA senior notes issued at 99.953% of face value September 2034 $ 650 $ 650 $ 643 (6) (1) Face value of notes less the applicable premium or discount (before deducting for initial purchaser discounts, commissions and offering expenses).
Because both product sales revenues and purchases and related costs are generally based off of the same pricing indices, the market price of the commodities will not necessarily have an impact on the absolute margins related to those sales and purchases. 73 Table of Contents Index to Financial Statements A majority of our crude oil sales and purchases are indexed to the prompt month price of the NYMEX Light, Sweet crude oil futures contract (“NYMEX Price”) and our NGL sales are indexed to Mont Belvieu prices.
Because both product sales revenues and purchases and related costs are generally based off of the same pricing indices, the market price of the commodities will not necessarily have an impact on the absolute margins related to those sales and purchases.
Liquidity and Capital Resources General Our primary sources of liquidity are (i) cash flow from operating activities and (ii) borrowings under PAA’s credit facilities or commercial paper program. In addition, we may supplement these primary sources of liquidity with proceeds from asset sales, and in the past have utilized funds received from sales of equity and debt securities.
In addition, we may supplement these primary sources of liquidity with proceeds from asset sales, and in the past have utilized funds received from sales of equity and debt securities.
See Note 11 to our Consolidated Financial Statements for details of distributions paid to noncontrolling interests during the three years ended December 31, 2024. Distributions to PAA’s Series A preferred unitholders. Holders of PAA’s Series A preferred units are entitled to receive quarterly distributions, subject to customary anti-dilution adjustments, of $0.615 per unit ($2.46 per unit annualized).
Holders of PAA’s Series A preferred units are entitled to receive quarterly distributions, subject to customary anti-dilution adjustments, of $0.615 per unit ($2.46 per unit annualized). Distributions to PAA’s Series B preferred unitholders.
See Note 6 and Note 9 to our Consolidated Financial Statements for additional information on our property and equipment, intangible assets and depreciation and amortization expense. See Note 2 to our Consolidated Financial Statements for additional information on our asset retirement obligations. Impairment Assessments of Property and Equipment, Investments in Unconsolidated Entities and Intangible Assets.
See Note 2 to our Consolidated Financial Statements for additional information on our asset retirement obligations. Impairment Assessments of Property and Equipment, Investments in Unconsolidated Entities and Intangible Assets. We periodically evaluate property and equipment for impairment when events or circumstances indicate that the carrying value of these assets may not be recoverable.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA 10% increase in the forward SOFR curve as of December 31, 2024 would have resulted in an increase of $13 million to the fair value of our interest rate derivatives.
Biggest changeThe fair value of our foreign currency derivatives was an asset of $8 million as of December 31, 2025. A 10% increase in the exchange rate (USD-to-CAD) would have resulted in an increase of $329 million to the fair value of our foreign currency derivatives.
Based upon the Series B preferred units outstanding at December 31, 2024 and the liquidation preference of $1,000 per unit, a change of 100 basis points in interest rates would increase or decrease the annual distributions on PAA’s Series B preferred units by approximately $8 million.
Based upon the Series B preferred units outstanding at December 31, 2025 and the liquidation preference of $1,000 per unit, a change of 100 basis points in interest rates would increase or decrease the annual distributions on PAA’s Series B preferred units by approximately $8 million.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to various market risks, including commodity price risk and interest rate risk. We use various derivative instruments to manage such risks and, in certain circumstances, to realize incremental margin during volatile market conditions.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to various market risks, including commodity price risk, interest rate risk and currency exchange rate risk. We use various derivative instruments to manage such risks and, in certain circumstances, to realize incremental margin during volatile market conditions.
In the event of an actual 10% change in near-term commodity prices, the fair value of our derivative portfolio would typically change less than that shown in the table as changes in near-term prices are not typically mirrored in delivery months further out. Interest Rate Risk Debt .
In the event of an actual 10% change in near-term commodity prices, the fair value of our derivative portfolio would typically change less than that shown in the table as changes in near-term prices are not typically mirrored in delivery months further out. 92 Table of Contents Index to Financial Statements Interest Rate Risk Debt .
Our use of variable rate debt and any forecasted issuances of fixed rate debt expose us to interest rate risk. Therefore, from time to time, we use interest rate derivatives to hedge interest rate risk associated with anticipated interest payments and, in certain cases, outstanding debt instruments.
Our use of variable rate debt and any forecasted issuances of fixed rate debt expose us to interest rate risk. Therefore, from time to time, we use interest rate derivatives to hedge interest rate risk associated with anticipated interest payments and, in certain cases, outstanding debt instruments. We did not have any interest rate derivatives as of December 31, 2025.
All of PAA’s senior notes are fixed rate notes and thus are not subject to interest rate risk. Our variable rate debt outstanding at December 31, 2024, approximately $393 million, was subject to interest rate resets that generally occur within one week or less.
All of PAA’s senior notes are fixed rate notes and thus are not subject to interest rate risk. Our variable rate debt outstanding at December 31, 2025, approximately $2.069 billion, was subject to interest rate resets that generally occur within one month or less.
Our objectives for these derivatives include hedging anticipated purchases and sales and stored inventory. We manage these exposures with various instruments including futures, forwards, swaps and options. See Note 12 to our Consolidated Financial Statements for further discussion regarding our hedging strategies and objectives.
We manage these exposures with various instruments including futures, swaps and options. See Note 13 to our Consolidated Financial Statements for further discussion regarding our hedging strategies and objectives.
Commodity Price Risk We use derivative instruments to hedge price risk associated with the following commodities: • Crude oil We utilize crude oil derivatives to hedge commodity price risk inherent in our pipeline, terminalling and merchant activities. Our objectives for these derivatives include hedging anticipated purchases and sales, stored inventory and basis differentials.
Commodity Price Risk We use derivative instruments to hedge price risk associated with the following commodities: • Crude oil We utilize crude oil derivatives to hedge commodity price risk inherent in our pipeline, terminalling and merchant activities.
The fair value of our commodity derivatives and the change in fair value as of December 31, 2024 that would be expected from a 10% price increase or decrease is shown in the table below (in millions): 93 Table of Contents Index to Financial Statements Fair Value Effect of 10% Price Increase Effect of 10% Price Decrease Crude oil $ 7 $ (3) $ 5 Natural gas (22) $ 6 $ (6) NGL and other (61) $ (46) $ 46 Total fair value $ (76) The fair values presented in the table above reflect the sensitivity of the derivative instruments only and do not include the effect of the underlying hedged commodity.
The fair value of our commodity derivatives and the change in fair value as of December 31, 2025 that would be expected from a 10% price increase or decrease is shown in the table below (in millions): Fair Value Effect of 10% Price Increase Effect of 10% Price Decrease Crude oil $ 1 $ (5) $ 5 Power (5) $ 1 $ (1) Total fair value $ (4) The fair values presented in the table above reflect the sensitivity of the derivative instruments only and do not include the effect of the underlying hedged commodity.
See Note 11 to our Consolidated Financial Statements for additional information regarding PAA’s Series B preferred unit distributions. Item 8. Financial Statements and Supplementary Data See “Index to the Consolidated Financial Statements” on page F-1. Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None.
Financial Statements and Supplementary Data See “Index to the Consolidated Financial Statements” on page F-1. Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None.
A 10% decrease in the forward SOFR curve as of December 31, 2024 would have resulted in a decrease of $13 million to the fair value of our interest rate derivatives. See Note 12 to our Consolidated Financial Statements for a discussion of our interest rate risk hedging activities. Series B Preferred Units .
A 10% decrease in the exchange rate (USD-to-CAD) would have resulted in a decrease of $329 million to the fair value of our foreign currency derivatives. See Note 13 to our Consolidated Financial Statements for additional information regarding our currency exchange rate risk hedging. Item 8.
The average interest rate on variable rate debt that was outstanding during the year ended December 31, 2024 was 5.6%, based upon rates in effect during the year. The fair value of our interest rate derivatives was a net asset of $27 million as of December 31, 2024.
The average interest rate on variable rate debt that was outstanding during the year ended December 31, 2025 was 4.6%, based upon rates in effect during the year. See Note 11 to our Consolidated Financial Statements for additional information regarding our debt arrangements. Series B Preferred Units .
Removed
We manage these exposures with various instruments including futures, forwards, swaps and options. • Natural gas We utilize natural gas derivatives to hedge commodity price risk inherent in our natural gas processing assets (natural gas purchase component of the frac spread).
Added
Our objectives for these derivatives include hedging changes in inventory positions associated with our lease gathering activities, anticipated purchases and sales, stored inventory and basis differentials. We manage these exposures with various instruments including futures, forwards, swaps and options. • Power We utilize power derivatives to hedge anticipated operational requirements related to our crude oil pipelines.
Removed
Additionally, we utilize natural gas derivatives to hedge anticipated operational fuel gas requirements related to our natural gas processing and NGL fractionation plants.
Added
See Note 12 to our Consolidated Financial Statements for additional information regarding PAA’s Series B preferred unit distributions. Currency Exchange Rate Risk We use foreign currency derivatives to hedge foreign currency exchange rate risk associated with our exposure to fluctuations in the USD-to-CAD exchange rate.
Removed
We manage these exposures with various instruments including futures, swaps and options. • NGL and other We utilize NGL derivatives, primarily propane and butane derivatives, to hedge commodity price risk inherent in our commercial activities, including the sale of the individual specification products extracted in our natural gas processing assets (sale of specification NGL products component of the frac spread), as well as other net sales of NGL inventory, held mainly at our owned NGL storage terminals.

Other PAGP 10-K year-over-year comparisons