Plains All American Pipeline and Plains GP Holdings Announce Quarterly Distributions and Timing of Fourth-Quarter 2023 Earnings

Rhea-AI Summary

Plains All American Pipeline, L.P. (Nasdaq: PAA) and Plains GP Holdings (Nasdaq: PAGP) announced their quarterly distributions and the timing of fourth-quarter 2023 earnings. PAA increased its quarterly cash distribution by $0.05 per Common Unit, representing a 19% annualized increase. PAGP also increased its Class A Share distribution by $0.05, also a 19% annualized increase. PAA's Series A Preferred Units will receive $0.61524 per unit, and Series B Preferred Units will receive $24.92 per unit. PAA and PAGP will release Q4 2023 earnings on February 9, 2024, followed by a conference call with analysts and investors.

Insights

Financial Analyst

The announcement of increased quarterly cash distributions by Plains All American Pipeline, L.P. (PAA) and Plains GP Holdings (PAGP) indicates a positive cash flow situation, which may be a result of efficient operations or strategic acquisitions. The 19% annualized increase in distributions could signal confidence from management in the company's ability to generate and sustain higher cash flows. This is significant for investors as it may imply a robust financial health of the company and a potential for higher returns on their investments.

Additionally, the expected non-taxable nature of the PAGP cash distribution per Class A Share up to the extent of a shareholder's tax basis suggests a favorable tax implication for investors. This could potentially increase the attractiveness of PAGP shares for income-focused investors. However, investors should be aware of the long-term sustainability of such distributions, particularly in the volatile energy sector where market conditions can rapidly change.

Tax Advisor

The tax implications of the distributions for PAGP Class A Shareholders are notable. The classification of the distribution as a non-taxable return of capital, to the extent of the shareholder's tax basis, followed by a capital gain, is a tax-efficient way to return value to shareholders. This can be particularly advantageous for investors with a high tax basis in their shares. However, it is crucial for individual investors to understand the impact on their personal tax situation and consult with a tax professional, especially considering the complexities of tax regulations concerning Master Limited Partnerships (MLPs) and their distributions.

Market Analyst

The increased distribution and the announcement of the fourth-quarter earnings release date by PAA and PAGP are likely to influence market expectations. The market typically reacts to such announcements with an analysis of the distribution coverage ratio and the sustainability of the payouts. Given that PAA operates a significant network of midstream energy infrastructure, the company's performance is a bellwether for the midstream sector and can impact peer companies and the broader energy market. The timing of the earnings release and subsequent conference call provides investors with a schedule to anticipate detailed financial results and strategic commentary from management, which could affect the stock's performance in the short term.

HOUSTON, Jan. 08, 2024 (GLOBE NEWSWIRE) -- Plains All American Pipeline, L.P. (Nasdaq: PAA) and Plains GP Holdings (Nasdaq: PAGP) today announced their quarterly distributions with respect to the fourth quarter of 2023 and also announced timing of fourth quarter 2023 earnings.

Fourth Quarter Distribution Declaration 

PAA and PAGP announced the following quarterly cash distributions, each of which will be payable on February 14, 2024 to holders of the respective securities at the close of business on January 31, 2024:

• PAA Common Units – $0.3175 per Common Unit ($1.27 per unit on an annualized basis), which represents a $0.05 increase from the distribution paid in November 2023 ($0.20 per unit increase, or 19%, on an annualized basis).
• PAGP Class A Shares – $0.3175 per Class A Share ($1.27 per Class A Share on an annualized basis), which also represents a $0.05 increase from the distribution paid in November 2023 ($0.20 per unit increase, or 19%, on an annualized basis).
• PAA Series A Preferred Units – $0.61524 per Series A Preferred Unit (approximately $2.46 per unit on an annualized basis).
  

For its Series B Preferred Units, PAA announced a quarterly distribution of $24.92 per Series B Unit, which will be payable on February 15, 2024 to holders of record at the close of business on February 1, 2024.

Although equity holders should consult their own tax advisor regarding their particular circumstances, the PAGP cash distribution per Class A Share is expected to be a non-taxable return of capital to the extent of a Class A Shareholder’s tax basis in each PAGP Class A Share and a reduction in such tax basis. In addition, to the extent any cash distribution exceeds a Class A Shareholder’s tax basis, it should be taxable as a capital gain. Qualified Notices under Treasury Regulation Section 1.1446 with respect to the PAA Common Unit distribution and PAA Series B Preferred Unit distribution will be posted on the Plains website under “Investor Relations – Tax Information.”

Fourth Quarter 2023 Earnings Timing

PAA and PAGP also announced that they will release fourth-quarter 2023 earnings before market open on Friday, February 9, 2024. Following the announcement, PAA and PAGP will host a conference call at 9:00 a.m. CT (10 a.m. ET) with analysts and investors to discuss earnings. The call will be webcast live on the internet and may be accessed through the "Investors Relations” section of the website at www.plains.com. An audio replay will be available on the website after the call.

PAA is a publicly traded master limited partnership that owns and operates midstream energy infrastructure and provides logistics services for crude oil and natural gas liquids (NGL). PAA owns an extensive network of pipeline gathering and transportation systems, in addition to terminalling, storage, processing, fractionation and other infrastructure assets serving key producing basins, transportation corridors and major market hubs and export outlets in the United States and Canada. On average, PAA handles approximately 8 million barrels per day of crude oil and NGL.

PAGP is a publicly traded entity that owns an indirect, non-economic controlling general partner interest in PAA and an indirect limited partner interest in PAA, one of the largest energy infrastructure and logistics companies in North America.

PAA and PAGP are headquartered in Houston, Texas. More information is available at www.plains.com.

Investor Relations Contacts:        

Blake Fernandez
Michael Gladstein
(866) 809-1291

FAQ

What is the ticker symbol for Plains All American Pipeline, L.P.?

The ticker symbol for Plains All American Pipeline, L.P. is PAA.

What are the quarterly cash distributions announced by Plains All American Pipeline, L.P.?

Plains All American Pipeline, L.P. announced a $0.05 increase per Common Unit, a 19% annualized increase, and $0.61524 per Series A Preferred Unit.

When will the fourth-quarter 2023 earnings be released?

PAA and PAGP will release fourth-quarter 2023 earnings on February 9, 2024.

Where can I find more information about Plains All American Pipeline, L.P.?

More information about Plains All American Pipeline, L.P. is available at www.plains.com.