PLAINS ALL AMERICAN PIPELINE LP [PAA] Filings

10-Q 1 paa-20230930.htm 10-Q paa-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________

FORM 10-Q

________________________________________________________________________________________________________________________________

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-14569

________________________________________________________________

PLAINS ALL AMERICAN PIPELINE, L.P.

(Exact name of registrant as specified in its charter)


Delaware						76-0582150
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

333 Clay Street, Suite 1600

Houston, Texas 77002

(Address of principal executive offices) (Zip code)

(713) 646-4100

(Registrant’s telephone number, including area code)

________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units	PAA	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of October 31, 2023, there were 700,992,512 Common Units outstanding.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets: As of September 30, 2023 and December 31, 2022			3
Condensed Consolidated Statements of Operations: For the three and nine months ended September 30, 2023 and 2022			4
Condensed Consolidated Statements of Comprehensive Income/(Loss): For the three and nine months ended September 30, 2023 and 2022			5
Condensed Consolidated Statements of Changes in Accumulated Other Comprehensive Income/(Loss): For the three and nine months ended September 30, 2023 and 2022			5
Condensed Consolidated Statements of Cash Flows: For the nine months ended September 30, 2023 and 2022			6
Condensed Consolidated Statements of Changes in Partners’ Capital: For the three and nine months ended September 30, 2023 and 2022			7
Notes to the Condensed Consolidated Financial Statements:
1. Organization and Basis of Consolidation and Presentation			9

2. Revenues and Accounts Receivable			11
3. Net Income Per Common Unit			14
4. Inventory, Linefill and Long-term Inventory			15
5. Debt			16
6. Partners’ Capital and Distributions			17
7. Derivatives and Risk Management Activities			19
8. Related Party Transactions			23
9. Commitments and Contingencies			25
10. Segment Information			30
11. Acquisitions and Divestitures			33

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			36
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			56
Item 4. CONTROLS AND PROCEDURES			57

PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS			58
Item 1A. RISK FACTORS			58
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			58
Item 3. DEFAULTS UPON SENIOR SECURITIES			58
Item 4. MINE SAFETY DISCLOSURES			58
Item 5. OTHER INFORMATION			58
Item 6. EXHIBITS			59
SIGNATURES			63

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PART I. FINANCIAL INFORMATION

Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except unit data)


	September 30, 2023		December 31, 2022
	(unaudited)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	260	$	401

Trade accounts receivable and other receivables, net	4,253		3,907
Inventory	617		729
Other current assets	201		318
Total current assets	5,331		5,355

PROPERTY AND EQUIPMENT	20,853		20,020
Accumulated depreciation	(5,264)		(4,770)
Property and equipment, net	15,589		15,250

OTHER ASSETS
Investments in unconsolidated entities	2,830		3,084
Intangible assets, net	1,969		2,145
Linefill	957		961
Long-term operating lease right-of-use assets, net	315		349
Long-term inventory	327		284
Other long-term assets, net	417		464
Total assets	$	27,735	$	27,892

LIABILITIES AND PARTNERS’ CAPITAL

CURRENT LIABILITIES
Trade accounts payable	$	4,145	$	4,044
Short-term debt	710		1,159
Other current liabilities	751		688
Total current liabilities	5,606		5,891

LONG-TERM LIABILITIES
Senior notes, net	7,241		7,237
Other long-term debt, net	55		50
Long-term operating lease liabilities	280		308
Other long-term liabilities and deferred credits	1,002		1,081
Total long-term liabilities	8,578		8,676

COMMITMENTS AND CONTINGENCIES (NOTE 9)

PARTNERS’ CAPITAL
Series A preferred unitholders (71,090,468 and 71,090,468 units outstanding, respectively)	1,508		1,505
Series B preferred unitholders (800,000 and 800,000 units outstanding, respectively)	787		787
Common unitholders (700,992,512 and 698,354,498 units outstanding, respectively)	7,990		7,765
Total partners’ capital excluding noncontrolling interests	10,285		10,057
Noncontrolling interests	3,266		3,268
Total partners’ capital	13,551		13,325
Total liabilities and partners’ capital	$	27,735	$	27,892

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per unit data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(unaudited)				(unaudited)
REVENUES
Product sales revenues	$	11,581	$	14,001	$	34,726	$	43,390
Services revenues	490		335		1,288		1,000
Total revenues	12,071		14,336		36,014		44,390

COSTS AND EXPENSES
Purchases and related costs	11,106		13,071		32,972		41,181
Field operating costs	372		318		1,062		971
General and administrative expenses	92		83		263		243
Depreciation and amortization	260		238		776		711
(Gains)/losses on asset sales and asset impairments, net	7		—		(144)		(46)
Total costs and expenses	11,837		13,710		34,929		43,060

OPERATING INCOME	234		626		1,085		1,330

OTHER INCOME/(EXPENSE)
Equity earnings in unconsolidated entities	99		105		277		306
Gain on investment in unconsolidated entities	29		1		28		1
Interest expense (net of capitalized interest of $3, $1, $8, and $3, respectively)	(97)		(99)		(290)		(305)
Other income/(expense), net	—		(82)		85		(237)

INCOME BEFORE TAX	265		551		1,185		1,095
Current income tax expense	(22)		(12)		(104)		(60)
Deferred income tax (expense)/benefit	36		(97)		22		(117)

NET INCOME	279		442		1,103		918
Net income attributable to noncontrolling interests	(76)		(58)		(185)		(144)
NET INCOME ATTRIBUTABLE TO PAA	$	203	$	384	$	918	$	774

NET INCOME PER COMMON UNIT (NOTE 3):
Net income allocated to common unitholders — Basic and Diluted	$	140	$	333	$	728	$	621
Basic and diluted weighted average common units outstanding	700		698		699		702
Basic and diluted net income per common unit	$	0.20	$	0.48	$	1.04	$	0.89

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(unaudited)				(unaudited)
Net income	$	279	$	442	$	1,103	$	918
Other comprehensive income/(loss)	(35)		(173)		50		(150)
Comprehensive income	244		269		1,153		768
Comprehensive income attributable to noncontrolling interests	(76)		(58)		(185)		(144)
Comprehensive income attributable to PAA	$	168	$	211	$	968	$	624

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

(in millions)


	Derivative Instruments		Translation Adjustments		Other		Total
	(unaudited)
Balance at December 31, 2022	$	(107)	$	(846)	$	(1)	$	(954)

Reclassification adjustments	8		—		—		8
Unrealized gain on hedges	40		—		—		40
Currency translation adjustments	—		2		—		2

Total period activity	48		2		—		50
Balance at September 30, 2023	$	(59)	$	(844)	$	(1)	$	(904)


	Derivative Instruments		Translation Adjustments		Other		Total
	(unaudited)
Balance at December 31, 2021	$	(208)	$	(642)	$	(3)	$	(853)

Reclassification adjustments	5		—		—		5
Unrealized gain on hedges	88		—		—		88
Currency translation adjustments	—		(241)		—		(241)
Other	—		—		(2)		(2)
Total period activity	93		(241)		(2)		(150)
Balance at September 30, 2022	$	(115)	$	(883)	$	(5)	$	(1,003)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Nine Months Ended September 30,
	2023		2022
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,103	$	918
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	776		711
Gains on asset sales and asset impairments, net	(144)		(46)


Deferred income tax expense/(benefit)	(22)		117
Gains on sales of linefill	(2)		(35)
(Gain)/loss on foreign currency revaluation	(4)		42
Settlement of terminated interest rate hedging instruments (Note 7)	80		42
Change in fair value of Preferred Distribution Rate Reset Option (Note 7)	(58)		196
Equity earnings in unconsolidated entities	(277)		(306)
Distributions on earnings from unconsolidated entities	351		344
Gain on investment in unconsolidated entities	(28)		(1)
Other	55		42
Changes in assets and liabilities, net of acquisitions	(114)		50
Net cash provided by operating activities	1,716		2,074

CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions, net of cash acquired	(289)		(68)
Investments in unconsolidated entities	(28)		(3)
Additions to property, equipment and other	(404)		(312)
Cash paid for purchases of linefill	(19)		(69)
Proceeds from sales of assets	286		58

Cash received from sales of linefill	9		72
Other investing activities	1		31
Net cash used in investing activities	(444)		(291)

CASH FLOWS FROM FINANCING ACTIVITIES





Repayments of senior notes (Note 5)	(400)		(750)

Repurchase of common units	—		(74)
Distributions paid to Series A preferred unitholders (Note 6)	(123)		(112)
Distributions paid to Series B preferred unitholders (Note 6)	(55)		(25)
Distributions paid to common unitholders (Note 6)	(560)		(432)
Distributions paid to noncontrolling interests (Note 6)	(237)		(194)
Contributions from noncontrolling interests	53		26


Other financing activities	(87)		(47)
Net cash used in financing activities	(1,409)		(1,608)

Effect of translation adjustment	(4)		(5)

Net increase/(decrease) in cash and cash equivalents and restricted cash	(141)		170
Cash and cash equivalents and restricted cash, beginning of period	401		453
Cash and cash equivalents and restricted cash, end of period	$	260	$	623

Cash paid for:
Interest, net of amounts capitalized	$	247	$	268
Income taxes, net of amounts refunded	$	28	$	85

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(in millions)


	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at December 31, 2022	$	1,505	$	787	$	7,765	$	10,057	$	3,268	$	13,325
Net income	129		56		733		918		185		1,103
Distributions (Note 6)	(129)		(56)		(560)		(745)		(237)		(982)
Other comprehensive income	—		—		50		50		—		50

Contributions from noncontrolling interests	—		—		—		—		53		53
Other	3		—		2		5		(3)		2
Balance at September 30, 2023	$	1,508	$	787	$	7,990	$	10,285	$	3,266	$	13,551

	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at June 30, 2023	$	1,507	$	787	$	8,085	$	10,379	$	3,223	$	13,602
Net income	44		19		140		203		76		279
Distributions (Note 6)	(44)		(19)		(187)		(250)		(86)		(336)
Other comprehensive loss	—		—		(35)		(35)		—		(35)

Contributions from noncontrolling interests	—		—		—		—		53		53

Other	1		—		(13)		(12)		—		(12)
Balance at September 30, 2023	$	1,508	$	787	$	7,990	$	10,285	$	3,266	$	13,551

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(continued)

(in millions)


	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at December 31, 2021	$	1,505	$	787	$	7,680	$	9,972	$	2,838	$	12,810
Net income	112		37		625		774		144		918
Distributions	(112)		(37)		(432)		(581)		(194)		(775)
Other comprehensive loss	—		—		(150)		(150)		—		(150)
Repurchase of common units	—		—		(74)		(74)		—		(74)
Contributions from noncontrolling interests	—		—		—		—		26		26
Other	—		—		3		3		(15)		(12)
Balance at September 30, 2022	$	1,505	$	787	$	7,652	$	9,944	$	2,799	$	12,743

	Limited Partners						Partners’ Capital Excluding Noncontrolling Interests		Noncontrolling Interests		Total Partners’ Capital
	Preferred Unitholders				Common Unitholders
	Series A		Series B
	(unaudited)
Balance at June 30, 2022	$	1,505	$	787	$	7,639	$	9,931	$	2,788	$	12,719
Net income	37		12		335		384		58		442
Distributions	(37)		(12)		(152)		(201)		(73)		(274)
Other comprehensive loss	—		—		(173)		(173)		—		(173)

Contributions from noncontrolling interests	—		—		—		—		26		26
Other	—		—		3		3		—		3
Balance at September 30, 2022	$	1,505	$	787	$	7,652	$	9,944	$	2,799	$	12,743

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Organization and Basis of Consolidation and Presentation

Organization

Plains All American Pipeline, L.P. (“PAA”) is a Delaware limited partnership formed in 1998. Our operations are conducted directly and indirectly through our primary operating subsidiaries. As used in this Form 10-Q and unless the context indicates otherwise, the terms “Partnership,” “we,” “us,” “our,” “ours” and similar terms refer to PAA and its subsidiaries.

Our business model integrates large-scale supply aggregation capabilities with the ownership and operation of critical midstream infrastructure systems that connect major producing regions to key demand centers and export terminals. As one of the largest midstream service providers in North America, we own an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and natural gas liquids (“NGL”) producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada. Our assets and the services we provide are primarily focused on and conducted through two operating segments: Crude Oil and NGL. See Note 10 for further discussion of our operating segments.

Our non-economic general partner interest is held by PAA GP LLC (“PAA GP”), a Delaware limited liability company, whose sole member is Plains AAP, L.P. (“AAP”), a Delaware limited partnership. In addition to its ownership of PAA GP, as of September 30, 2023, AAP also owned a limited partner interest in us through its ownership of approximately 239.0 million of our common units (approximately 31% of our total outstanding common units and Series A preferred units combined). Plains All American GP LLC (“GP LLC”), a Delaware limited liability company, is AAP’s general partner. Plains GP Holdings, L.P. (“PAGP”) is the sole and managing member of GP LLC, and, at September 30, 2023, owned an approximate 82% limited partner interest in AAP. PAA GP Holdings LLC (“PAGP GP”) is the general partner of PAGP.

As the sole member of GP LLC, PAGP has responsibility for conducting our business and managing our operations; however, the board of directors of PAGP GP has ultimate responsibility for managing the business and affairs of PAGP, AAP and us. GP LLC employs our domestic officers and personnel; our Canadian officers and personnel are employed by our subsidiary, Plains Midstream Canada ULC.

References to our “general partner,” as the context requires, include any or all of PAGP GP, PAGP, GP LLC, AAP and PAA GP.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Definitions

Additional defined terms are used in this Form 10-Q and shall have the meanings indicated below:


AOCI	=	Accumulated other comprehensive income/(loss)
ASC	=	Accounting Standards Codification
ASU	=	Accounting Standards Update
Bcf	=	Billion cubic feet
Btu	=	British thermal unit
CAD	=	Canadian dollar
CODM	=	Chief Operating Decision Maker
EBITDA	=	Earnings before interest, taxes, depreciation and amortization
EPA	=	United States Environmental Protection Agency
FASB	=	Financial Accounting Standards Board
GAAP	=	Generally accepted accounting principles in the United States
ICE	=	Intercontinental Exchange
ISDA	=	International Swaps and Derivatives Association

LTIP	=	Long-term incentive plan
Mcf	=	Thousand cubic feet
MMbls	=	Million barrels
NGL	=	Natural gas liquids, including ethane, propane and butane
NYMEX	=	New York Mercantile Exchange
SEC	=	United States Securities and Exchange Commission
SOFR	=	Secured Overnight Financing Rate
TWh	=	Terawatt hour
USD	=	United States dollar
WTI	=	West Texas Intermediate

Basis of Consolidation and Presentation

The accompanying unaudited condensed consolidated interim financial statements and related notes thereto should be read in conjunction with our 2022 Annual Report on Form 10-K. The accompanying condensed consolidated financial statements include the accounts of PAA and all of its wholly owned subsidiaries and those entities that it controls. Investments in entities over which we have significant influence but not control are accounted for by the equity method. We apply proportionate consolidation for pipelines and other assets in which we own undivided joint interests. The financial statements have been prepared in accordance with the instructions for interim reporting as set forth by the SEC. The condensed consolidated balance sheet data as of December 31, 2022 was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three and nine months ended September 30, 2023 should not be taken as indicative of results to be expected for the entire year. All adjustments (consisting only of normal recurring adjustments) that in the opinion of management were necessary for a fair statement of the results for the interim periods have been reflected. All significant intercompany balances and transactions have been eliminated in consolidation, and certain reclassifications have been made to information from previous years to conform to the current presentation.

Subsequent Events

Subsequent events have been evaluated through the financial statements issuance date and have been included in the following footnotes where applicable.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

Except as discussed below and in our 2022 Annual Report on Form 10-K, there have been no new accounting pronouncements that have become effective or have been issued during the nine months ended September 30, 2023 that are of significance or potential significance to us.

In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. This guidance is effective prospectively for all joint ventures with a formation date on or after January 1, 2025, with early adoption permitted. We will adopt this guidance for joint venture formations on January 1, 2025.

Note 2—Revenues and Accounts Receivable

Revenue Recognition

We disaggregate our revenues by segment and type of activity. See Note 3 to our Consolidated Financial Statements included in Part IV of our 2022 Annual Report on Form 10-K for additional information regarding our types of revenues and policies for revenue recognition.

Revenues from Contracts with Customers. The following tables present our revenues from contracts with customers disaggregated by segment and type of activity (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Crude Oil segment revenues from contracts with customers
Sales	$	11,525	$	13,362	$	33,843	$	41,796
Transportation	333		185		839		515
Terminalling, Storage and Other	99		90		284		270
Total Crude Oil segment revenues from contracts with customers	$	11,957	$	13,637	$	34,966	$	42,581


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
NGL segment revenues from contracts with customers
Sales	$	283	$	417	$	1,168	$	1,761
Transportation	7		7		23		23
Terminalling, Storage and Other	23		21		74		66
Total NGL segment revenues from contracts with customers	$	313	$	445	$	1,265	$	1,850

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation to Total Revenues of Reportable Segments. The following disclosures only include information regarding revenues associated with consolidated entities; revenues from entities accounted for by the equity method are not included. The following tables present the reconciliation of our revenues from contracts with customers to total revenues of reportable segments and total revenues as disclosed in our Condensed Consolidated Statements of Operations (in millions):


Three Months Ended September 30, 2023	Crude Oil		NGL		Total
Revenues from contracts with customers	$	11,957	$	313	$	12,270
Other revenues	(23)		(71)		(94)
Total revenues of reportable segments	$	11,934	$	242	$	12,176
Intersegment revenues elimination					(105)
Total revenues					$	12,071

Three Months Ended September 30, 2022	Crude Oil		NGL		Total
Revenues from contracts with customers	$	13,637	$	445	$	14,082
Other revenues	38		325		363
Total revenues of reportable segments	$	13,675	$	770	$	14,445
Intersegment revenues elimination					(109)
Total revenues					$	14,336

Nine Months Ended September 30, 2023	Crude Oil		NGL		Total
Revenues from contracts with customers	$	34,966	$	1,265	$	36,231
Other items in revenues	22		47		69
Total revenues of reportable segments	$	34,988	$	1,312	$	36,300
Intersegment revenues					(286)
Total revenues					$	36,014

Nine Months Ended September 30, 2022	Crude Oil		NGL		Total
Revenues from contracts with customers	$	42,581	$	1,850	$	44,431
Other items in revenues	113		225		338
Total revenues of reportable segments	$	42,694	$	2,075	$	44,769
Intersegment revenues					(379)
Total revenues					$	44,390

Minimum Volume Commitments. We have certain agreements that require counterparties to transport or throughput a minimum volume over an agreed upon period. The following table presents counterparty deficiencies associated with contracts with customers and buy/sell arrangements that include minimum volume commitments for which we had remaining performance obligations and the customers still had the ability to meet their obligations (in millions):


Counterparty Deficiencies	Financial Statement Classification	September 30, 2023		December 31, 2022
Billed and collected	Other current liabilities	$	80	$	104
Unbilled (1)	N/A	1		1
Total		$	81	$	105

(1)Amounts were related to deficiencies for which the counterparties had not met their contractual minimum commitments and are not reflected in our Condensed Consolidated Financial Statements as we had not yet billed or collected such amounts.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances. Our contract balances consist of amounts received associated with services or sales for which we have not yet completed the related performance obligation. The following table presents the changes in the liability balance associated with contracts with customers (in millions):


	Contract Liabilities
Balance at December 31, 2022	$	229
Amounts recognized as revenue	(40)

Additions	45

Balance at September 30, 2023	$	234

Remaining Performance Obligations. The information below includes the amount of consideration allocated to partially and wholly unsatisfied remaining performance obligations under contracts that existed as of the end of the periods and the timing of revenue recognition of those remaining performance obligations. Certain contracts meet the requirements for the presentation as remaining performance obligations. These contracts include a fixed minimum level of service, typically a set volume of service, and do not contain any variability other than expected timing within a limited range. The following table presents the amount of consideration associated with remaining performance obligations for the population of contracts with external customers meeting the presentation requirements as of September 30, 2023 (in millions):


	Remainder of 2023		2024		2025		2026		2027		2028 and Thereafter
Pipeline revenues supported by minimum volume commitments and capacity agreements (1)	$	89	$	357	$	319	$	148	$	103	$	266
Terminalling, storage and other agreement revenues	69		220		137		107		95		747
Total	$	158	$	577	$	456	$	255	$	198	$	1,013

(1)Calculated as volumes committed under contracts multiplied by the current applicable tariff rate.

The presentation above does not include (i) expected revenues from legacy shippers not underpinned by minimum volume commitments, including pipelines where there are no or limited alternative pipeline transportation options, (ii) intersegment revenues and (iii) the amount of consideration associated with certain income generating contracts, which include a fixed minimum level of service, that are either not within the scope of ASC 606 or do not meet the requirements for presentation as remaining performance obligations. The following are examples of contracts that are not included in the table above because they are not within the scope of ASC 606 or do not meet the requirements for presentation:

•Minimum volume commitments on certain of our joint venture pipeline systems;

•Acreage dedications;

•Buy/sell arrangements with future committed volumes;

•Short-term contracts and those with variable consideration, due to the election of practical expedients;

•Contracts within the scope of ASC Topic 842, Leases; and

•Contracts within the scope of ASC Topic 815, Derivatives and Hedging.

Trade Accounts Receivable and Other Receivables, Net

At September 30, 2023 and December 31, 2022, substantially all of our trade accounts receivable were less than 30 days past their invoice date. Our expected credit losses are immaterial. Although we consider our credit procedures to be adequate to mitigate any significant credit losses, the actual amount of current and future credit losses could vary significantly from estimated amounts.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following is a reconciliation of trade accounts receivable from revenues from contracts with customers to total Trade accounts receivable and other receivables, net as presented on our Condensed Consolidated Balance Sheets (in millions):


	September 30, 2023		December 31, 2022
Trade accounts receivable arising from revenues from contracts with customers	$	4,449	$	4,141
Other trade accounts receivables and other receivables (1)	8,278		7,216
Impact due to contractual rights of offset with counterparties	(8,474)		(7,450)
Trade accounts receivable and other receivables, net	$	4,253	$	3,907

(1)The balance is comprised primarily of accounts receivable associated with buy/sell arrangements that are not within the scope of ASC 606.

Note 3—Net Income Per Common Unit

We calculate basic and diluted net income per common unit by dividing net income attributable to PAA (after deducting amounts allocated to the preferred unitholders and participating securities) by the basic and diluted weighted average number of common units outstanding during the period.

The diluted weighted average number of common units is computed based on the weighted average number of common units plus the effect of potentially dilutive securities outstanding during the period, which include (i) our Series A preferred units and (ii) our equity-indexed compensation plan awards. See Note 12 and Note 18 to our Consolidated Financial Statements included in Part IV of our 2022 Annual Report on Form 10-K for a discussion of our Series A preferred units and equity-indexed compensation plan awards. When applying the if-converted method prescribed by FASB guidance, the possible conversion of approximately 71 million Series A preferred units, on a weighted-average basis, were excluded from the calculation of diluted net income per common unit for each of the three and nine months ended September 30, 2023 and 2022 as the effect was antidilutive. Our equity-indexed compensation plan awards that contemplate the issuance of common units are considered potentially dilutive unless (i) they become vested only upon the satisfaction of a performance condition and (ii) that performance condition has yet to be satisfied. Equity-indexed compensation plan awards that are deemed to be dilutive during the period are reduced by a hypothetical common unit repurchase based on the remaining unamortized fair value, as prescribed by the treasury stock method in guidance issued by the FASB.

The following table sets forth the computation of basic and diluted net income per common unit (in millions, except per unit data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Basic and Diluted Net Income per Common Unit
Net income attributable to PAA	$	203	$	384	$	918	$	774
Distributions to Series A preferred unitholders	(44)		(37)		(129)		(112)
Distributions to Series B preferred unitholders	(19)		(12)		(56)		(37)
Amounts allocated to participating securities	(1)		(2)		(8)		(4)
Other	1		—		3		—
Net income allocated to common unitholders (1)	$	140	$	333	$	728	$	621

Basic and diluted weighted average common units outstanding	700		698		699		702

Basic and diluted net income per common unit	$	0.20	$	0.48	$	1.04	$	0.89

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)We calculate net income allocated to common unitholders based on the distributions pertaining to the current period’s net income. After adjusting for the appropriate period’s distributions, the remaining undistributed earnings or excess distributions over earnings (i.e., undistributed loss), if any, are allocated to the common unitholders and participating securities in accordance with the contractual terms of our partnership agreement in effect for the period and as further prescribed under the two-class method.

Note 4—Inventory, Linefill and Long-term Inventory

Inventory, linefill and long-term inventory consisted of the following (barrels in thousands and carrying value in millions):


	September 30, 2023						December 31, 2022
	Volumes	Unit of Measure	Carrying Value		Price/ Unit (1)		Volumes	Unit of Measure	Carrying Value		Price/ Unit (1)
Inventory
Crude oil	4,491	barrels	$	366	$	81.50	6,713	barrels	$	452	$	67.33
NGL	9,107	barrels	242		$	26.57	7,285	barrels	270		$	37.06

Other	N/A		9		N/A		N/A		7		N/A
Inventory subtotal			617						729

Linefill
Crude oil	15,255	barrels	891		$	58.41	15,480	barrels	906		$	58.53
NGL	2,195	barrels	66		$	30.07	1,876	barrels	55		$	29.32

Linefill subtotal			957						961

Long-term inventory
Crude oil	3,254	barrels	290		$	89.12	3,102	barrels	246		$	79.30
NGL	1,326	barrels	37		$	27.90	1,066	barrels	38		$	35.65
Long-term inventory subtotal			327						284

Total			$	1,901					$	1,974

(1)Price per unit of measure is comprised of a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5—Debt

Debt consisted of the following (in millions):


	September 30, 2023		December 31, 2022
SHORT-TERM DEBT



Senior notes:

2.85% senior notes due January 2023	$	—	$	400
3.85% senior notes due October 2023	700		700
Other	10		59
Total short-term debt	710		1,159

LONG-TERM DEBT
Senior notes, net of unamortized discounts and debt issuance costs of $42 and $46, respectively	7,241		7,237


Other	55		50
Total long-term debt	7,296		7,287
Total debt (1)	$	8,006	$	8,446

(1)Our fixed-rate senior notes had a face value of approximately $8.0 billion and $8.4 billion as of September 30, 2023 and December 31, 2022, respectively. We estimated the aggregate fair value of these notes as of September 30, 2023 and December 31, 2022 to be approximately $7.1 billion and $7.6 billion, respectively. Our fixed-rate senior notes are traded among institutions, and these trades are routinely published by a reporting service. Our determination of fair value is based on reported trading activity near the end of the reporting period. The fair value estimate for our senior notes is based upon observable market data and is classified in Level 2 of the fair value hierarchy.

Credit Facilities

In August 2023, we extended the maturity dates of our senior secured hedged inventory facility and senior unsecured revolving credit facility by one year to August 2026 and August 2028, respectively, for each extending lender. The maturity date with respect to the non-extending lender under our senior unsecured revolving credit facility (which represents a commitment of approximately $64 million out of total commitments of $1.35 billion from all lenders) remains August 2027.

Borrowings and Repayments

Total borrowings under our credit facilities and commercial paper program for the nine months ended September 30, 2023 and 2022 were approximately $4.9 billion and $19.3 billion, respectively. Total repayments under our credit facilities and commercial paper program were approximately $4.9 billion and $19.3 billion for the nine months ended September 30, 2023 and 2022, respectively. The variance in total gross borrowings and repayments is impacted by various business and financial factors including, but not limited to, the timing, average term and method of general partnership borrowing activities.

On January 31, 2023, we redeemed our 2.85%, $400 million senior notes due January 2023. On October 16, 2023, we redeemed our 3.85%, $700 million senior notes due October 2023.

Letters of Credit

In connection with our merchant activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase and transportation of crude oil and NGL. Additionally, we issue letters of credit to support insurance programs, derivative transactions, including hedging-related margin obligations, and construction activities. At September 30, 2023 and December 31, 2022, we had outstanding letters of credit of $147 million and $102 million, respectively.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6—Partners’ Capital and Distributions

Units Outstanding

The following tables present the activity for our preferred and common units:


	Limited Partners
	Series A Preferred Units	Series B Preferred Units	Common Units
Outstanding at December 31, 2022	71,090,468	800,000	698,354,498

Issuances of common units under equity-indexed compensation plans	—	—	35,508
Outstanding at March 31, 2023 and June 30, 20

PLAINS ALL AMERICAN PIPELINE LP [PAA] Filings

PLAINS ALL AMERICAN PIPELINE LP [PAAPU] Filings