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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 March 31, 2024
 
or
 
      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 classTrading Symbol(s)Name of each exchange on which registered
Common UnitsPAANasdaq
 
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 May 1, 2024, there were 701,071,031 Common Units outstanding.



PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
TABLE OF CONTENTS
 Page
 
 
 
  
  
 

2

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)
March 31,
2024
December 31,
2023
 (unaudited)
ASSETS  
CURRENT ASSETS  
Cash and cash equivalents$331 $450 
Trade accounts receivable and other receivables, net4,040 3,760 
Inventory453 548 
Other current assets177 155 
Total current assets5,001 4,913 
PROPERTY AND EQUIPMENT21,162 21,143 
Accumulated depreciation(5,491)(5,361)
Property and equipment, net15,671 15,782 
OTHER ASSETS  
Investments in unconsolidated entities2,878 2,820 
Intangible assets, net1,807 1,875 
Linefill981 976 
Long-term operating lease right-of-use assets, net298 313 
Long-term inventory299 265 
Other long-term assets, net421 411 
Total assets$27,356 $27,355 
LIABILITIES AND PARTNERS’ CAPITAL  
CURRENT LIABILITIES  
Trade accounts payable$3,991 $3,844 
Short-term debt554 446 
Other current liabilities599 713 
Total current liabilities5,144 5,003 
LONG-TERM LIABILITIES  
Senior notes, net7,244 7,242 
Other long-term debt, net64 63 
Long-term operating lease liabilities261 274 
Other long-term liabilities and deferred credits997 1,041 
Total long-term liabilities8,566 8,620 
COMMITMENTS AND CONTINGENCIES (NOTE 9)
PARTNERS’ CAPITAL  
Series A preferred unitholders (71,090,468 and 71,090,468 units outstanding, respectively)
1,510 1,509 
Series B preferred unitholders (800,000 and 800,000 units outstanding, respectively)
787 787 
Common unitholders (701,071,031 and 701,008,749 units outstanding, respectively)
8,042 8,126 
Total partners’ capital excluding noncontrolling interests10,339 10,422 
Noncontrolling interests3,307 3,310 
Total partners’ capital13,646 13,732 
Total liabilities and partners’ capital$27,356 $27,355 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per unit data)
Three Months Ended
March 31,
 20242023
 (unaudited)
REVENUES  
Product sales revenues$11,546 $11,943 
Services revenues449 398 
Total revenues11,995 12,341 
COSTS AND EXPENSES  
Purchases and related costs10,917 11,323 
Field operating costs358 357 
General and administrative expenses96 86 
Depreciation and amortization254 256 
(Gains)/losses on asset sales, net
— (154)
Total costs and expenses11,625 11,868 
OPERATING INCOME370 473 
OTHER INCOME/(EXPENSE)  
Equity earnings in unconsolidated entities95 89 
Interest expense (net of capitalized interest of $2 and $2, respectively)
(95)(98)
Other income/(expense), net(5)64 
INCOME BEFORE TAX365 528 
Current income tax expense(53)(61)
Deferred income tax benefit
39 8 
NET INCOME351 475 
Net income attributable to noncontrolling interests(85)(53)
NET INCOME ATTRIBUTABLE TO PAA$266 $422 
NET INCOME PER COMMON UNIT (NOTE 3):  
Net income allocated to common unitholders — Basic and Diluted$203 $361 
Basic and diluted weighted average common units outstanding701 698 
Basic and diluted net income per common unit$0.29 $0.52 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
 
Three Months Ended
March 31,
 20242023
 (unaudited)
Net income$351 $475 
Other comprehensive loss
(71)(1)
Comprehensive income280 474 
Comprehensive income attributable to noncontrolling interests
(85)(53)
Comprehensive income attributable to PAA$195 $421 
 
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
Total
 (unaudited)
Balance at December 31, 2023$(81)$(755)$(836)
Reclassification adjustments2 — 2 
Unrealized gain on hedges13 — 13 
Currency translation adjustments— (86)(86)
Total period activity15 (86)(71)
Balance at March 31, 2024$(66)$(841)$(907)

Derivative
Instruments
Translation
Adjustments
OtherTotal
 (unaudited)
Balance at December 31, 2022$(107)$(846)$(1)$(954)
Reclassification adjustments2 — — 2 
Unrealized loss on hedges(5)— — (5)
Currency translation adjustments— 1 — 1 
Other— — 1 1 
Total period activity(3)1 1 (1)
Balance at March 31, 2023$(110)$(845)$ $(955)
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Three Months Ended
March 31,
 20242023
 (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$351 $475 
Reconciliation of net income to net cash provided by operating activities:  
Depreciation and amortization254 256 
(Gains)/losses on asset sales, net— (154)
Deferred income tax benefit(39)(8)
Change in fair value of Preferred Distribution Rate Reset Option (Note 7)— (58)
Equity earnings in unconsolidated entities(95)(89)
Distributions on earnings from unconsolidated entities132 108 
Other8 15 
Changes in assets and liabilities, net of acquisitions(192)198 
Net cash provided by operating activities419 743 
CASH FLOWS FROM INVESTING ACTIVITIES  
Cash paid in connection with acquisitions, net of cash acquired(91)— 
Investments in unconsolidated entities(3)(4)
Additions to property, equipment and other(157)(122)
Cash paid for purchases of linefill(13)— 
Proceeds from sales of assets3 284 
Net cash provided by/(used in) investing activities(261)158 
CASH FLOWS FROM FINANCING ACTIVITIES  
Net borrowings under commercial paper program (Note 5)107 — 
Repayments of senior notes— (400)
Distributions paid to Series A preferred unitholders (Note 6)(44)(37)
Distributions paid to Series B preferred unitholders (Note 6)(20)(18)
Distributions paid to common unitholders (Note 6)(223)(187)
Distributions paid to noncontrolling interests (Note 6)(100)(78)
Contributions from noncontrolling interests12 — 
Other financing activities(5)(56)
Net cash used in financing activities(273)(776)
Effect of translation adjustment(4)— 
Net increase/(decrease) in cash and cash equivalents and restricted cash(119)125 
Cash and cash equivalents and restricted cash, beginning of period450 401 
Cash and cash equivalents and restricted cash, end of period$331 $526 
Cash paid/(received) for:  
Interest, net of amounts capitalized$64 $65 
Income taxes, net of amounts refunded$86 $(18)

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL
(in millions)

Limited PartnersPartners’
Capital Excluding Noncontrolling Interests
Noncontrolling InterestsTotal
Partners’
Capital
Preferred UnitholdersCommon
Unitholders
Series ASeries B
(unaudited)
Balance at December 31, 2023$1,509 $787 $8,126 $10,422 $3,310 $13,732 
Net income44 19 203 266 85 351 
Distributions (Note 6)(44)(19)(223)(286)(100)(386)
Other comprehensive loss— — (71)(71)— (71)
Contributions from noncontrolling interests— — — — 12 12 
Other1 — 7 8 — 8 
Balance at March 31, 2024$1,510 $787 $8,042 $10,339 $3,307 $13,646 


Limited PartnersPartners’
Capital Excluding Noncontrolling Interests
Noncontrolling InterestsTotal
Partners’
Capital
Preferred UnitholdersCommon
Unitholders
Series ASeries B
(unaudited)
Balance at December 31, 2022$1,505 $787 $7,765 $10,057 $3,268 $13,325 
Net income42 18 362 422 53 475 
Distributions(42)(18)(187)(247)(78)(325)
Other comprehensive loss— — (1)(1)— (1)
Other1 — 11 12 (3)9 
Balance at March 31, 2023$1,506 $787 $7,950 $10,243 $3,240 $13,483 

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 March 31, 2024, AAP also owned a limited partner interest in us through its ownership of approximately 232.7 million of our common units (approximately 30% 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 March 31, 2024, owned an approximate 85% 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 2023 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, 2023 was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three months ended March 31, 2024 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.

Subsequent Events

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

Recent Accounting Pronouncements and Disclosure Rules

Except as discussed in our 2023 Annual Report on Form 10-K, there have been no new accounting pronouncements that have become effective or have been issued during the three months ended March 31, 2024 that are of significance or potential significance to us.
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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


In March 2024, the SEC adopted final rules (“climate disclosure rules”) requiring registrants to disclose, among other things, information about material climate-related risks and their impact on a registrant’s strategy, business model and outlook; information about material direct and indirect greenhouse gas emissions (Scope 1 and Scope 2), which are subject to assurance requirements; and the financial statement effects of severe weather events and other natural conditions. Such disclosure requirements will begin phasing in for annual periods beginning in 2025. In April 2024, the SEC stayed the climate disclosure rules pending resolution of legal challenges. We are currently evaluating the climate disclosure rules to determine the impact on our related disclosures.

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 2023 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
March 31,
20242023
Crude Oil segment revenues from contracts with customers
Sales$11,185 $11,381 
Transportation300 250 
Terminalling, Storage and Other92 90 
Total Crude Oil segment revenues from contracts with customers$11,577 $11,721 

Three Months Ended
March 31,
20242023
NGL segment revenues from contracts with customers
Sales$600 $660 
Transportation10 8 
Terminalling, Storage and Other21 28 
Total NGL segment revenues from contracts with customers$631 $696 

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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 March 31, 2024Crude OilNGLTotal
Revenues from contracts with customers$11,577 $631 $12,208 
Other revenues
5 (124)(119)
Total revenues of reportable segments$11,582 $507 $12,089 
Intersegment revenues elimination
(94)
Total revenues$11,995 
Three Months Ended March 31, 2023Crude OilNGLTotal
Revenues from contracts with customers$11,721 $696 $12,417 
Other revenues
37 (6)31 
Total revenues of reportable segments$11,758 $690 $12,448 
Intersegment revenues elimination
(107)
Total revenues$12,341 

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 DeficienciesFinancial Statement ClassificationMarch 31,
2024
December 31,
2023
Billed and collectedOther current liabilities$60 $77 

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, 2023$228 
Amounts recognized as revenue(20)
Additions17 
Other(5)
Balance at March 31, 2024$220 

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 March 31, 2024 (in millions):

Remainder of 202420252026202720282029 and Thereafter
Pipeline revenues supported by minimum volume commitments and capacity agreements (1)
$299 $354 $163 $109 $80 $194 
Terminalling, storage and other agreement revenues182 169 132 118 100 708 
Total$481 $523 $295 $227 $180 $902 
(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 March 31, 2024 and December 31, 2023, 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.

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):
March 31,
2024
December 31,
2023
Trade accounts receivable arising from revenues from contracts with customers
$4,347 $3,999 
Other trade accounts receivables and other receivables (1)
8,284 7,535 
Impact due to contractual rights of offset with counterparties(8,591)(7,774)
Trade accounts receivable and other receivables, net$4,040 $3,760 
(1)The balance is comprised primarily of accounts receivable associated with buy/sell arrangements that are not within the scope of ASC 606.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 11 and Note 17 to our Consolidated Financial Statements included in Part IV of our 2023 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 months ended March 31, 2024 and 2023 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
March 31,
 20242023
Basic and Diluted Net Income per Common Unit  
Net income attributable to PAA$266 $422 
Distributions to Series A preferred unitholders
(44)(42)
Distributions to Series B preferred unitholders
(19)(18)
Amounts allocated to participating securities(1)(2)
Other
1 1 
Net income allocated to common unitholders (1)
$203 $361 
Basic and diluted weighted average common units outstanding701 698 
Basic and diluted net income per common unit$0.29 $0.52 
(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.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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):

 March 31, 2024December 31, 2023
 VolumesUnit of
Measure
Carrying
Value
Price/
Unit (1)
VolumesUnit of
Measure
Carrying
Value
Price/
Unit (1)
Inventory        
Crude oil5,578 barrels$374 $67.05 5,877 barrels$383 $65.17 
NGL2,604 barrels68 $26.11 5,957 barrels154 $25.85 
OtherN/A 11 N/AN/A 11 N/A
Inventory subtotal  453    548  
Linefill        
Crude oil15,541 barrels914 $58.81 15,409 barrels909 $58.99 
NGL2,242 barrels67 $29.88 2,168 barrels67 $30.90 
Linefill subtotal  981    976  
Long-term inventory        
Crude oil3,279 barrels262 $79.90 3,256 barrels232 $71.25 
NGL1,325 barrels37 $27.92 1,326 barrels33 $24.89 
Long-term inventory subtotal  299    265  
Total  $1,733    $1,789  
(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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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5—Debt
 
Debt consisted of the following (in millions):

March 31,
2024
December 31,
2023
SHORT-TERM DEBT  
Commercial paper notes, bearing a weighted-average interest rate of 5.7% and 5.8%, respectively (1)
$540 $433 
Other14 13 
Total short-term debt554 446 
LONG-TERM DEBT
Senior notes, net of unamortized discounts and debt issuance costs of $39 and $41, respectively (2)
7,244 7,242 
Other64 63 
Total long-term debt7,308 7,305 
Total debt (3)
$7,862 $7,751 
(1)We classified these commercial paper notes as short-term as of March 31, 2024 and December 31, 2023, as these notes were primarily designated as working capital borrowings, were required to be repaid within one year and were primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits.
(2)As of March 31, 2024 and December 31, 2023, we classified our $750 million, 3.60% senior notes due November 2024 as long-term based on our ability and intent to refinance these notes on a long-term basis.
(3)Our fixed-rate senior notes had a face value of approximately $7.3 billion as of March 31, 2024 and December 31, 2023. We estimated the aggregate fair value of these notes as of March 31, 2024 and December 31, 2023 to be approximately $6.9 billion. 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. We estimate that the carrying value of outstanding borrowings under our commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for our senior notes and commercial paper program are based upon observable market data and are classified in Level 2 of the fair value hierarchy.

Borrowings and Repayments
 
Total borrowings under our credit facilities and commercial paper program for the three months ended March 31, 2024 and 2023 were approximately $9.1 billion and $1.5 billion, respectively. Total repayments under our credit facilities and commercial paper program were approximately $9.0 billion and $1.5 billion for the three months ended March 31, 2024 and 2023, 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.

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 March 31, 2024 and December 31, 2023, we had outstanding letters of credit of $161 million and $205 million, respectively.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
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 UnitsSeries B Preferred UnitsCommon Units
Outstanding at December 31, 202371,090,468 800,000 701,008,749 
Issuances of common units under equity-indexed compensation plans— — 62,282 
Outstanding at March 31, 2024
71,090,468 800,000 701,071,031 
 
 Limited Partners
 Series A Preferred UnitsSeries B Preferred UnitsCommon Units
Outstanding at December 31, 202271,090,468 800,000 698,354,498 
Issuances of common units under equity-indexed compensation plans— — 35,508 
Outstanding at March 31, 202371,090,468 800,000 698,390,006 

Distributions

Series A Preferred Unit Distributions. Distributions on the Series A preferred units accumulate and are payable quarterly within 45 days following the end of each quarter. See Note 11 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional information regarding Series A preferred unit distributions. The following table details distributions to our Series A preferred unitholders paid during or pertaining to the first three months of 2024 (in millions, except per unit data):

Series A Preferred Unitholders
Distribution Payment DateCash DistributionDistribution per Unit
May 15, 2024 (1)
$44 $0.615 
February 14, 2024$44 $0.615 
(1)Payable to unitholders of record at the close of business on May 1, 2024 for the period from January 1, 2024 through March 31, 2024. At March 31, 2024, such amount was accrued as distributions payable in “Other current liabilities” on our Condensed Consolidated Balance Sheet.

Series B Preferred Unit Distributions. Distributions on the Series B preferred units accumulate and are payable quarterly in arrears on the 15th day of February, May, August and November. See Note 11 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional information regarding Series B preferred unit distributions. The following table details distributions paid or to be paid to our Series B preferred unitholders (in millions, except per unit data):

Series B Preferred Unitholders
Distribution Payment DateCash Distribution Distribution per Unit
May 15, 2024 (1)
$19 $24.20 
February 15, 2024$20 $24.92 
(1)Payable to unitholders of record at the close of business on May 1, 2024 for the period from February 15, 2024 through May 14, 2024. At March 31, 2024, approximately $10 million of accrued distributions payable to our Series B preferred unitholders was included in “Other current liabilities” on our Condensed Consolidated Balance Sheet.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Common Unit Distributions. The following table details distributions to our common unitholders paid during or pertaining to the first three months of 2024 (in millions, except per unit data):

Distributions
Distribution per Common Unit
Common UnitholdersTotal Cash Distribution
Distribution Payment DatePublicAAP
May 15, 2024 (1)
$149 $74 $223 $0.3175 
February 14, 2024$149 $74 $223 $0.3175 
(1)Payable to unitholders of record at the close of business on May 1, 2024 for the period from January 1, 2024 through March 31, 2024.

Noncontrolling Interests in Subsidiaries

As of March 31, 2024, noncontrolling interests in our subsidiaries consisted of (i) a 35% interest in Plains Oryx Permian Basin LLC (the “Permian JV”), (ii) a 30% interest in Cactus II Pipeline LLC (“Cactus II”) and (iii) a 33% interest in Red River Pipeline Company LLC (“Red River”).

Distributions to Noncontrolling Interests

The following table details distributions paid to noncontrolling interests during the periods presented (in millions):

Three Months Ended
March 31,
20242023
Permian JV$74 $58 
Cactus II
20 14 
Red River6 6 
$100 $78 

Note 7—Derivatives and Risk Management Activities
 
We identify the risks that underlie our core business activities and use risk management strategies to mitigate those risks when we determine that there is value in doing so. We use various derivative instruments to optimize our profits while managing our exposure to commodity price risk and interest rate risk. Our commodity price risk management policies and procedures are designed to help ensure that our hedging activities address our risks by monitoring our derivative positions, as well as physical volumes, grades, locations, delivery schedules and storage capacity. Our interest rate risk management policies and procedures are designed to monitor our derivative positions and ensure that those positions are consistent with our objectives and approved strategies. Our policy is to use derivative instruments for risk management purposes and not for the purpose of speculating on changes in commodity prices or interest rates. When we apply hedge accounting, our policy is to formally document all relationships between hedging instruments and hedged items, as well as our risk management objectives for undertaking the hedge. This process includes specific identification of the hedging instrument and the hedged transaction, the nature of the risk being hedged and how the hedging instrument’s effectiveness will be assessed. At the inception of the hedging relationship, we assess whether the derivatives employed are highly effective in offsetting changes in cash flows of anticipated hedged transactions. Throughout the hedging relationship, retrospective and prospective hedge effectiveness is assessed on a qualitative basis.
 
We record all open derivatives on the balance sheet as either assets or liabilities measured at fair value. Changes in the fair value of derivatives are recognized currently in earnings unless specific hedge accounting criteria are met. For derivatives designated as cash flow hedges, changes in fair value are deferred in AOCI and recognized in earnings in the periods during which the underlying hedged transactions are recognized in earnings. Derivatives that are not designated in a hedging relationship for accounting purposes are recognized in earnings each period. Cash settlements associated with our derivative activities are classified within the same category as the related hedged item in our Condensed Consolidated Statements of Cash Flows.

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our financial derivatives, used for hedging risk, are governed through ISDA master agreements and clearing brokerage agreements. These agreements include stipulations regarding the right of set off in the event that we or our counterparty default on performance obligations. If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties.

At March 31, 2024 and December 31, 2023, none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in our credit ratings. Although we may be required to post margin on our exchange-traded derivatives transacted through a clearing brokerage account, as described below, we do not require our non-cleared derivative counterparties to post collateral with us.

Commodity Price Risk Hedging
 
Our core business activities involve certain commodity price-related risks that we manage in various ways, including through the use of derivative instruments. Our policy is to (i) only purchase inventory for which we have a sales market, (ii) structure our sales contracts so that price fluctuations do not materially affect our operating income and (iii) not acquire and hold material physical inventory or derivatives for the purpose of speculating on commodity price changes. The material commodity-related risks inherent in our business activities are described below.

In the normal course of our operations, we purchase and sell commodities. We use derivatives to manage the associated risks and to optimize profits. As of March 31, 2024, net derivative positions related to these activities included:
 
A net long position of 5.6 million barrels associated with our crude oil purchases, which was unwound ratably during April 2024 to match monthly average pricing.
A net short time spread position of 4.8 million barrels, which hedges a portion of our anticipated crude oil lease gathering purchases through April 2025.
A net crude oil basis spread position of 2.8 million barrels at multiple locations through November 2025. These derivatives allow us to lock in grade and location basis differentials.
A net short position of 13.4 million barrels through March 2026 related to anticipated net sales of crude oil and NGL inventory.

We purchase natural gas for processing and operational needs. Additionally, we purchase NGL mix for fractionation and sell the resulting individual specification products (including ethane, propane, butane and condensate). In conjunction with these activities, we hedge the price risk associated with the purchase of the natural gas and the subsequent sale of the individual specification products. The following table summarizes our open derivative positions utilized to hedge the price risk associated with anticipated purchases and sales related to our natural gas processing and NGL fractionation activities as of March 31, 2024:

Notional Volume
(Short)/LongRemaining Tenor
Natural gas purchases
68.5 Bcf
June 2025
Propane sales
(12.4) MMbls
June 2025
Butane sales
(2.1) MMbls
December 2024
Condensate sales
(2.8) MMbls
March 2025
Fuel gas requirements (1)
5.7 Bcf
December 2025
Power supply requirements (1)
2.5 TWh
December 2030
(1)Positions to hedge a portion of our power supply and fuel gas requirements at our Canadian natural gas processing and fractionation plants.

Physical commodity contracts that meet the definition of a derivative but are ineligible, or not designated, for the normal purchases and normal sales scope exception are recorded on the balance sheet at fair value, with changes in fair value recognized in earnings. We have determined that substantially all of our physical commodity contracts qualify for the normal purchases and normal sales scope exception.
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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Our commodity derivatives are not designated in a hedging relationship for accounting purposes; as such, changes in the fair value are reported in earnings. The following table summarizes the impact of our commodity derivatives recognized in earnings (in millions):

 Three Months Ended
March 31,
 20242023
Product sales revenues$(173)$(1)
Field operating costs(16)(19)
   Net gain/(loss) from commodity derivative activity
$(189)$(20)

Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists. Accordingly, we also offset derivative assets and liabilities with amounts associated with cash margin. Our exchange-traded derivatives are transacted through clearing brokerage accounts and are subject to margin requirements as established by the respective exchange. On a daily basis, our account equity (consisting of the sum of our cash balance and the fair value of our open derivatives) is compared to our initial margin requirement resulting in the payment or return of variation margin. The following table provides the components of our net broker receivable/(payable) (in millions):

March 31,
2024
December 31,
2023
Initial margin$64 $77 
Variation margin posted/(returned)
102 (65)
Letters of credit
(25)(25)
   Net broker receivable/(payable)
$141 $(13)

The following table reflects the Condensed Consolidated Balance Sheet line items that include the fair values of our commodity derivative assets and liabilities and the effect of the collateral netting. Such amounts are presented on a gross basis, before the effects of counterparty netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our Condensed Consolidated Balance Sheet when the legal right of offset exists. Amounts in the table below are presented in millions.

March 31, 2024December 31, 2023
Effect of Collateral NettingNet Carrying Value Presented on the Balance SheetEffect of Collateral NettingNet Carrying Value Presented on the Balance Sheet
Commodity DerivativesCommodity Derivatives
AssetsLiabilitiesAssetsLiabilities
Derivative Assets
Other current assets$42 $(106)$141 $77 $153 $(79)$(13)$61 
Other long-term assets, net2 (1)— 1 3 — — 3 
Derivative Liabilities
Other current liabilities2 (50)— (48)1 (64)— (63)
Other long-term liabilities and deferred credits— (26)— (26)1 (15)— (14)
Total$46 $(183)$141 $4 $158 $(158)$(13)$(13)

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Interest Rate Risk Hedging
 
We use interest rate derivatives to hedge the benchmark interest rate associated with interest payments occurring as a result of debt issuances. The derivative instruments we use to manage this risk consist of forward starting interest rate swaps and treasury locks. These derivatives are designated as cash flow hedges. As such, changes in fair value are deferred in AOCI and are reclassified to interest expense as we incur the interest expense associated with the underlying debt.

The following table summarizes the terms of our outstanding interest rate derivatives as of March 31, 2024 (notional amounts in millions):

Hedged TransactionNumber and Types of
Derivatives Employed
Notional
Amount
Expected
Termination Date
Average Rate
Locked
Accounting
Treatment
Anticipated interest payments
8 forward starting swaps
(30-year)
$200 6/15/20263.09%Cash flow hedge
Anticipated interest payments
4 forward starting swaps
(30-year)
$100 6/14/20240.74%Cash flow hedge
 
As of March 31, 2024, there was a net loss of $66 million deferred in AOCI. The deferred net loss recorded in AOCI is expected to be reclassified to future earnings contemporaneously with interest expense accruals associated with underlying debt instruments. We estimate that substantially all of the remaining deferred loss will be reclassified to earnings through 2056 as the underlying hedged transactions impact earnings. A portion of these amounts is based on market prices as of March 31, 2024; thus, actual amounts to be reclassified will differ and could vary materially as a result of changes in market conditions.

The following table summarizes the net unrealized gain/(loss) recognized in AOCI for derivatives (in millions):

Three Months Ended
March 31,
 20242023
Interest rate derivatives, net$13 $(5)

At March 31, 2024, the net fair value of our interest rate hedges, which were included in “Other current assets” and “Other long-term assets, net” on our Condensed Consolidated Balance Sheet, totaled $55 million and $13 million, respectively. At December 31, 2023, the net fair value of these hedges totaled $51 million and $4 million, which were included in “Other current assets” and “Other long-term assets, net”, respectively.
 
Recurring Fair Value Measurements
 
Derivative Financial Assets and Liabilities
 
The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis (in millions):

 Fair Value as of March 31, 2024Fair Value as of December 31, 2023
Recurring Fair Value Measures (1)
Level 1Level 2TotalLevel 1Level 2Total
Commodity derivatives$(10)$(127)$(137)$9 $(9)$— 
Interest rate derivatives— 68 68 — 55 55 
Total net derivative asset/(liability)$(10)$(59)$(69)$9 $46 $55 
(1)Derivative assets and liabilities are presented above on a net basis but do not include related cash margin deposits.

Level 1
 
Level 1 of the fair value hierarchy includes exchange-traded commodity derivatives and over-the-counter commodity contracts such as futures and swaps. The fair value of exchange-traded commodity derivatives and over-the-counter commodity contracts is based on unadjusted quoted prices in active markets.
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Level 2
 
Level 2 of the fair value hierarchy includes exchange-cleared commodity derivatives and over-the-counter commodity and interest rate derivatives that are traded in observable markets with less volume and transaction frequency than active markets. In addition, it includes certain physical commodity contracts. The fair values of these derivatives are corroborated with market observable inputs.

Rollforward of Level 3 Net Asset/(Liability)
 
The Preferred Distribution Rate Reset Option was accounted for as an embedded derivative that was bifurcated from the related host contract and recorded at fair value. The Preferred Distribution Rate Reset Option was settled in January 2023 when we received notice that the Series A preferred unitholders elected the Preferred Distribution Rate Reset Option, which resulted in a gain of $58 million recognized in “Other income/(expense), net” in our Condensed Consolidated Statement of Operations for the three months ended March 31, 2023. See Note 12 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional information regarding the Preferred Distribution Rate Reset Option.

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the Preferred Distribution Rate Reset Option embedded derivative, which was classified as Level 3 in the fair value hierarchy (in millions):

Three Months Ended
March 31, 2023
Beginning Balance$(189)
Net gains/(losses) for the period included in earnings
58 
Settlements131 
Ending Balance$ 
Change in unrealized gains/(losses) included in earnings relating to Level 3 derivatives still held at the end of the period$ 

Note 8—Related Party Transactions
 
See Note 16 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for a complete discussion of related parties, including the determination of our related parties and nature of involvement with such related parties.

Promissory Notes with our General Partner

In March 2023, PAGP issued an unsecured promissory note to us with a face value of CAD$500 million (“related party note receivable”). Concurrently, we assigned PAGP our interest in an existing unsecured promissory note for the same face value amount due from a consolidated subsidiary (“related party note payable”). Both notes are due April 2027 and bear interest at a rate of 8.25% per annum, payable semi-annually.

Accrued and unpaid interest receivable/payable was $3 million and $10 million as of March 31, 2024 and December 31, 2023, respectively. Interest income/expense on the related party notes totaled $8 million and $3 million for the three months ended March 31, 2024 and 2023, respectively.

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As of March 31, 2024 and December 31, 2023, our outstanding related party note receivable and related party note payable balances were as follows (in millions):

March 31,
2024
December 31,
2023
Related party note receivable (1)
$369 $379 
Related party note payable (1)
$369 $379 
(1)We have elected to present our related party notes with the same counterparty on a net basis on our Condensed Consolidated Balance Sheet because there is a legal right to offset and we intend to offset with the counterparty.

Transactions with Other Related Parties

During the three months ended March 31, 2024 and 2023, we recognized sales and transportation revenues, purchased petroleum products and utilized transportation and storage services from related parties. These transactions were conducted at posted tariff rates or prices that we believe approximate market.

The impact to our Condensed Consolidated Statements of Operations from these transactions is included below (in millions):

Three Months Ended
March 31,
 20242023
Revenues from related parties$11 $11 
Purchases and related costs from related parties$97 $99 

Our receivable and payable amounts with these related parties as reflected on our Condensed Consolidated Balance Sheets were as follows (in millions):

March 31,
2024
December 31,
2023
Trade accounts receivable and other receivables, net from related parties (1)
$46 $63 
Trade accounts payable to related parties (1) (2)
$67 $72 
(1)Includes amounts related to transportation and storage services and amounts owed to us or advanced to us related to investment capital projects of equity method investees where we serve as construction manager.
(2)We have agreements to store crude oil at facilities and transport crude oil or utilize capacity on pipelines that are owned by equity method investees. A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities.

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Note 9—Commitments and Contingencies
 
Loss Contingencies — General
 
To the extent we are able to assess the likelihood of a negative outcome for a contingency, our assessments of such likelihood range from remote to probable. If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, we accrue an undiscounted liability equal to the estimated amount. If a range of probable loss amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then we accrue an undiscounted liability equal to the minimum amount in the range. In addition, we estimate legal fees that we expect to incur associated with loss contingencies and accrue those costs when they are material and probable of being incurred.
 
We do not record a contingent liability when the likelihood of loss is probable but the amount cannot be reasonably estimated or when the likelihood of loss is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and the impact would be material to our consolidated financial statements, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.

Legal Proceedings — General
 
In the ordinary course of business, we are involved in various legal proceedings, including those arising from regulatory and environmental matters. In connection with determining the probability of loss associated with such legal proceedings and whether any potential losses associated therewith are estimable, we take into account what we believe to be all relevant known facts and circumstances, and what we believe to be reasonable assumptions regarding the application of those facts and circumstances to existing agreements, laws and regulations. Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to fully protect us from losses arising from current or future legal proceedings.

Accordingly, we can provide no assurance that the outcome of the various legal proceedings that we are currently involved in, or will become involved with in the future, will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
 
Environmental — General

We currently own or lease, and in the past have owned and leased, properties where hazardous liquids, including hydrocarbons, are or have been handled. These properties and the hazardous liquids or associated wastes disposed thereon may be subject to the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act, as amended, and the U.S. federal Resource Conservation and Recovery Act, as amended, as well as state and Canadian federal and provincial laws and regulations. Under such laws and regulations, we could be required to remove or remediate hazardous liquids or associated wastes (including wastes disposed of or released by prior owners or operators) and to clean up contaminated property (including contaminated groundwater). Assets we have acquired or will acquire in the future may have environmental remediation liabilities for which we are not indemnified or insured.

Although we have made significant investments in our maintenance and integrity programs, we have experienced (and likely will experience future) releases of hydrocarbon products into the environment from our pipeline, rail, storage and other facility operations. These releases can result from accidents or from unpredictable man-made or natural forces and may reach surface water bodies, groundwater aquifers or other sensitive environments. We also may discover environmental impacts from past releases that were previously unidentified. Damages and liabilities associated with any such releases from our existing or future assets could be significant and could have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
 
We record environmental liabilities when environmental assessments and/or remedial efforts are probable and the amounts can be reasonably estimated. Generally, our recording of these accruals coincides with our completion of a feasibility study or our commitment to a formal plan of action. We do not discount our environmental remediation liabilities to present value. We also record environmental liabilities assumed in business combinations based on the estimated fair value of the environmental obligations caused by past operations of the acquired company. We record receivables for amounts we believe are recoverable from insurance or from third parties under indemnification agreements in the period that we determine the costs are probable of recovery.

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Environmental expenditures that pertain to current operations or to future revenues are expensed or capitalized consistent with our capitalization policy for property and equipment. Expenditures that result from the remediation of an existing condition caused by past operations and that do not contribute to current or future profitability are expensed.
 
At March 31, 2024, our estimated undiscounted reserve for environmental liabilities (excluding liabilities related to the Line 901 incident, as discussed further below) totaled $56 million, of which $11 million was classified as short-term and $45 million was classified as long-term. At December 31, 2023, our estimated undiscounted reserve for environmental liabilities (excluding liabilities related to the Line 901 incident) totaled $56 million, of which $10 million was classified as short-term and $46 million was classified as long-term. Such short-term liabilities are reflected in “Other current liabilities” and long-term liabilities are reflected in “Other long-term liabilities and deferred credits” on our Condensed Consolidated Balance Sheets. At both March 31, 2024 and December 31, 2023, we had recorded receivables (excluding receivables related to the Line 901 incident) totaling $4 million for amounts probable of recovery under insurance and from third parties under indemnification agreements, approximately $1 million of which for each period is reflected in “Other long-term assets, net” and the remainder is reflected in “Trade accounts receivable and other receivables, net” on our Condensed Consolidated Balance Sheets. 
 
In some cases, the actual cash expenditures associated with these liabilities may not occur for three years or longer. Our estimates used in determining these reserves are based on information currently available to us and our assessment of the ultimate outcome. Among the many uncertainties that impact our estimates are the necessary regulatory approvals for, and potential modification of, our remediation plans, the limited amount of data available upon initial assessment of the impact of soil or water contamination, changes in costs associated with environmental remediation services and equipment and the possibility of existing or future legal claims giving rise to additional liabilities. Therefore, although we believe that the reserve is adequate, actual costs incurred (which may ultimately include costs for contingencies that are currently not reasonably estimable or costs for contingencies where the likelihood of loss is currently believed to be only reasonably possible or remote) may be in excess of the reserve and may potentially have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
 
Specific Legal, Environmental or Regulatory Matters

Line 901 Incident. In May 2015, we experienced a crude oil release from our Las Flores to Gaviota Pipeline (Line 901) in Santa Barbara County, California. A portion of the released crude oil reached the Pacific Ocean at Refugio State Beach through a drainage culvert. Following the release, we shut down the pipeline and initiated our emergency response plan. A Unified Command, which included the United States Coast Guard, the EPA, the State of California Department of Fish and Wildlife (“CDFW”), the California Office of Spill Prevention and Response and the Santa Barbara Office of Emergency Management, was established for the response effort. Clean-up and remediation operations with respect to impacted shoreline and other areas has been determined by the Unified Command to be complete, and the Unified Command has been dissolved. Our estimate of the amount of oil spilled, based on relevant facts, data and information, and as set forth in the Consent Decree described below, is approximately 2,934 barrels; of this amount, we estimate that 598 barrels reached the Pacific Ocean.

As a result of the Line 901 incident, several governmental agencies and regulators initiated investigations into the Line 901 incident, various claims have been made against us and a number of lawsuits have been filed against us, the majority of which have been resolved. Set forth below is a brief summary of actions and matters that are currently pending or recently resolved.
     
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As the “responsible party” for the Line 901 incident we are liable for various costs and for certain natural resource damages under the Oil Pollution Act. In this regard, following the Line 901 incident, we entered into a cooperative Natural Resource Damage Assessment (“NRDA”) process with the federal and state agencies designated or authorized by law to act as trustees for the natural resources of the United States and the State of California (collectively, the “Trustees”). Additionally, various government agencies sought to collect civil fines and penalties under applicable state and federal regulations. On March 13, 2020, the United States and the People of the State of California filed a civil complaint against Plains All American Pipeline, L.P. and Plains Pipeline L.P. along with a pre-negotiated settlement agreement in the form of a Consent Decree (the “Consent Decree”) that was signed by the United States Department of Justice, Environmental and Natural Resources Division, the United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration, the EPA, CDFW, the California Department of Parks and Recreation, the California State Lands Commission, the California Department of Forestry and Fire Protection’s Office of the State Fire Marshal, Central Coast Regional Water Quality Control Board, and Regents of the University of California. The Consent Decree was approved and entered by the Federal District Court for the Central District of California on October 14, 2020. Pursuant to the terms of the Consent Decree, Plains paid $24 million in civil penalties and $22.325 million as compensation for injuries to, destruction of, loss of, or loss of use of natural resources resulting from the Line 901 incident. The Consent Decree, which resolved all regulatory claims related to the incident, also contains requirements for implementing certain agreed-upon injunctive relief, as well as requirements for potentially restarting Line 901 and the Sisquoc to Pentland portion of Line 903. On October 13, 2022, Plains sold Line 901 and the Sisquoc to Pentland portion of Line 903 to Pacific Pipeline Company, an indirect wholly owned subsidiary of Exxon Mobil Corporation. As required by the terms of the Consent Decree, such purchaser assumed responsibility for compliance with the Consent Decree as it relates to the future ownership and operation of Line 901 and the Sisquoc to Pentland portion of Line 903.

Following an investigation and grand jury proceedings, in May of 2016, PAA was charged by a California state grand jury, pursuant to an indictment filed in California Superior Court, Santa Barbara County (the “May 2016 Indictment”), with alleged violations of California law in connection with the Line 901 incident. Fifteen charges from the May 2016 Indictment were the subject of a jury trial in California Superior Court in Santa Barbara County, and the jury returned a verdict on September 7, 2018, pursuant to which we were (i) found guilty on one felony discharge count and eight misdemeanor counts (which included one reporting count, one strict liability discharge count and six strict liability animal takings counts) and (ii) found not guilty on one strict liability animal takings count. The remaining counts were subsequently dismissed by the Court. On April 25, 2019, PAA was sentenced to pay fines and penalties in the aggregate amount of just under $3.35 million for the convictions covered by the September 2018 jury verdict (the “2019 Sentence”). The fines and penalties imposed in connection with the 2019 Sentence have been paid. In September 2021, the Superior Court concluded a series of hearings on the issue of whether there were any “direct victims” of the spill that are entitled to restitution under applicable criminal law. Through a series of final orders issued at the trial court level and without affecting any rights of the claimants under civil law, the Court dismissed the vast majority of the claims and ruled that the claimants were not entitled to restitution under applicable criminal laws. The Court did award an aggregate amount of less than $150,000 to a handful of claimants and we settled with approximately 40 claimants before the hearings for aggregate consideration that is not material. The prosecution and certain separately represented claimants have appealed the Court’s rulings.
    
We also received several individual lawsuits and claims from companies, governmental agencies and individuals alleging damages arising out of the Line 901 incident. These lawsuits and claims generally seek restitution, compensatory and punitive damages, and/or injunctive relief. The majority of these lawsuits have been settled or dismissed by the court. In addition to the other lawsuits disclosed herein, the following lawsuits remain: (i) a lawsuit in California Superior Court in Santa Barbara County for lost revenue or profit asserted by a former oil producer that declared bankruptcy and shut in its offshore production platform following the Line 901 incident, which is currently scheduled for trial in July 2024; (ii) a lawsuit filed by the California State Land Commission in California Superior Court in Santa Barbara County seeking lost royalties following the shut-down of Line 901, as well as costs related to the decommissioning of such platform, which is currently scheduled for trial in October 2024, and (iii) lawsuits filed in California Superior Court in Santa Barbara County by various companies and individuals who provided labor, goods, or services associated with oil production activities they claim were disrupted following the Line 901 incident, which lawsuits have not yet been set for trial. We are vigorously defending these remaining lawsuits and believe we have strong defenses.

Furthermore, shortly following the Line 901 incident, we established a claims line and encouraged any parties that were damaged by the release to contact us to discuss their damage claims. We received a number of claims through the claims line and we have processed those claims and made payments as appropriate.

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Additionally, a class action lawsuit was filed against us in United States District Court for the Central District of California in which the class plaintiffs seek a declaratory judgment that Plains’ right-of-way agreements would not allow Plains to lay a new pipeline to replace Line 901 and/or the non-operating segment of Line 903 without paying additional compensation. The purchaser of Line 901 and the Sisquoc to Pentland portion of Line 903 has assumed liability for these claims with respect to its interest in such acquired pipelines and Plains has been dismissed from this portion of the lawsuit. In the same proceeding, a small subset of plaintiffs are also claiming damages to compensate them for trespass and the alleged diminished value of their properties due to the stigma of the oil spill. We are vigorously defending against these immaterial claims. This case is currently scheduled to go to trial in July 2024.

In a separate class action lawsuit that was pending in United States District Court for the Central District of California, the plaintiffs claimed two different classes of claimants were damaged by the release: (i) commercial fishermen who landed fish in certain specified fishing blocks in the waters off the coast of Southern California or persons or businesses who resold commercial seafood caught in those areas; and (ii) owners and lessees of residential beachfront properties, or properties with a private easement to a beach, where plaintiffs claim oil from the spill washed up. In 2022, in order to fully and finally resolve all claims and litigation for both classes, we reached an agreement to settle this case in exchange for a payment of $230 million (the “Class Action Settlement”). The Class Action Settlement was formally approved by the trial court on September 20, 2022, and we made the $230 million settlement payment on October 27, 2022 and the lawsuit was subsequently dismissed.

Plains formally submitted claims for reimbursement of the Class Action Settlement to our insurance carriers on November 7, 2022. To date, we have received payment of approximately $3.6 million from one insurer, which represents the final payment obligation of such insurer and brings the total amount collected from all insurers under such program to $275 million of the $500 million policy limits as of March 31, 2024. Insurers responsible for $