Plains All American Pipeline, L.P.

Good day, and thank you for standing by. Welcome to Plains All-America's third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's call is being recorded. I would now like to hand the conference over to your speaker today, Blake Fernandez, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Norma. Good morning, and welcome to Plains All-American third quarter 23 earnings call. Today's slide presentation is posted on the Investor Relations website under the news and events section at plains.com. An audio replay will also be available following today's call. Important disclosures regarding forward-looking statements and non-GAAP financial measures are provided on slide two. An overview of today's call is provided on slide three. A condensed consolidating balance sheet for PAGP and other reference materials are in the appendix. Today's call will be hosted by Willie Chang, our chairman and CEO, and Al Swanson, executive vice president and CFO, as well as other members of our management team. With that, I will turn the call over to Willie.

Thanks, Blake. Happy Friday, everyone, and thank you for joining us this morning. Today we reported strong third quarter results. along with the closing of two Permian gathering bolt-on acquisitions and the continued execution of our multi-year capital allocation framework, which is focused on lowering leverage and increasing the return of capital to our unit holders. As a result of our year-to-date performance and the partial yield contributions of our recent bolt-on acquisitions, we are raising our full year 2023 adjusted EBITDA guidance to a range of $2.6 to $2.65 billion. This reflects an increase of 50 to 100 million from the high end of our previous guidance range. A high-level overview of our updated 2023 guidance is located on slide four, and Al will share additional detail in his portion of the call. As summarized on slide five, our Permian JV acquired Rattler Midstream's Southern Delaware Basin Crew Gathering System and LM Energy's Northern Delaware Basin Touchdown Crew Gathering System for an aggregate cash consideration of approximately $205 million or approximately $135 million net to Plains. These bolt-on acquisitions are expected to generate unlevered returns in line with our return thresholds of approximately 300 to 500 basis points above our weighted average cost of capital, in addition to enhancing our position in the Delaware Basin. The assets will further position the Permian JV to expand its service and offerings and extend commercial relationships with both new and existing customers. Regarding today's capital allocation update, we continue to make meaningful progress towards our goal of lower absolute debt and maintaining a strong balance sheet that can withstand various commodity cycles. As highlighted on slide 6, we are lowering our long-term leverage ratio target range to 3.25x to 3.75x. This is intended to be a long-term target range where we may operate below the low end of the range during certain periods or temporarily above the top end of the range in the event of strategic transactions with a goal of moving back into the target range on a long-term basis. We expect to exit the year below three and a half times due to a reduction in net debt of approximately $450 million, which is underpinned by the repayment of 1.1 billion of senior notes in 2023. In further support of our capital allocation framework laid out in November of 22, we intend to recommend to our board a 20 cent per unit annualized increase in our quarterly distribution payable in February of 2024, as seen on slide seven. On an annualized basis, the distribution would increase from $1.07 per unit currently to $1.27 per unit representing a 19% increase. I would also note the proposed acceleration and timing of our annual distribution increase, which would pull the increase forward from our May timing to February. This is all consistent with our objective of increasing returns to our unit holders, and it reflects our continued confidence in our business, which is bolstered by the benefits from the recent bolt-on acquisitions. Long term, Our free cash flow generation continues to support our multi-year capital allocation framework, which continues to target annualized distribution increases of approximately 15 cents per unit each year until reaching a target common unit distribution coverage of approximately 160%. With that, I'll turn the call over to Al.