2016 MLPA Investor Conference Orlando, FL June 2, 2016 1
Forward-Looking Statements & Non-GAAP Financial Measures Disclosure This presentation contains forward-looking statements, including, in particular, statements about the plans, strategies and prospects of Plains All American Pipeline, L.P. ( PAA ) and Plains GP Holdings, L.P. ( PAGP ). These forward-looking statements are based on PAA s current assumptions, expectations and projections about future events as of the date of our most recent guidance furnished on May 4, 2016, unless otherwise noted. Although PAA and PAGP believe that the expectations reflected in these forward-looking statements are reasonable, they can give no assurance that these expectations will prove to be correct or that synergies or other benefits anticipated in the forward-looking statements will be achieved. Important factors, some of which may be beyond PAA s or PAGP s control, that could cause actual results to differ materially from management s expectations are disclosed in PAA s and PAGP s respective filings with the Securities and Exchange Commission. This presentation also contains non-gaap financial measures relating to PAA. A reconciliation of these measures to the most directly comparable GAAP measures is available in the appendix to this presentation. For additional detail regarding selected items impacting comparability, please visit the Investor Relations section of PAA s website at www.plainsallamerican.com. 2
Discussion Outline Brief Overview Of Plains All American Potential simplification transaction Crude Oil Industry Outlook PAA s Positioning In The Current Environment Financial Overview Q&A 3
Plains All American Structure General Partner Structured as a limited partnership, but has checked the box to be taxed as a C-Corp. (Investor Receives 1099) ~59% economic interest Investors & Management Non-economic Interest Board Appointment Rights & Limited Voting Rights (2) General Partner Owners (1) PAGP Class "A" Shareholders 41% EMG (et. al.) 20% Kayne Anderson (et. al.) 12% Occidental Petroleum 12% Management 8% Others 7% PAGP Tax Attributes Expected over the next several years: PAGP will pay no income taxes None of the distributions paid to investors should be treated as taxable dividend income (NYSE: PAGP) ~41% economic interest Plains AAP, L.P. (AAP) 100% of GP + IDRs 100% Economic Interest Limited Voting Rights PAGP Public Investors Master Limited Partnership (MLP) (Investor Receives K-1) (NYSE: PAA) Operating Subsidiaries & Assets (Represents 100% of all operating assets) PAA Public Investors (1) Represents economic interest. Management ownership is a combination of directly held AAP interests & AAP management units. Ownership data as of 05/31/16. (2) Board appointment rights limited to non-management investors that own greater than 10% interest in AAP 4
Potential Simplification Transaction Currently evaluating a potential simplification transaction between PAA and its general partner Actively engaged with PAA & PAGP boards and 3 largest GP owners Kayne Anderson, EMG & Oxy, represent ~50% of GP Objective: Identify potential win/win transaction that best positions PAA for the long-term Requires assessments of PAA s future performance, opportunities and financial needs under various industry scenarios as well as a range of alternative structures Multi-tiered up-c structure provides more tax efficient flexibility compared to a typical GP/LP structure, but also requires incremental analysis Strong bias toward a non-taxable transaction & flow through structure Process is important Essential that we not only do the right thing, but follow a process that demonstrates thoughtful, prudent and balanced governance practices Target to complete evaluation by mid-to-late summer 2016 5
Plains All American Profile (NYSE: PAA & PAGP) Financial Profile (1) Total Enterprise Value $26.6 B PAA Equity Market Cap (2) $10.8 B PAGP Equity Market Cap (3) $6.0 B Total LT Debt $9.7 B Current PAA Yield ~12.1% Current PAGP Yield ~10.1% PAA Total Assets $22.3 B PAA S&P / Moody s Ratings BBB/Baa3 PAA Public Guidance Mid-point 2016 Adjusted EBITDA (4) ~$2.18 B 2016 Adj. Net Income (4) ~$1.16 B Pipelines (active miles) Liquids Storage Natural Gas Storage Fractionation Facilities (6) Natural Gas Processing (7) Crude & NGL Rail Facilities 28 19,200 miles 135 mmbls 97 Bcf 181,000 b/d 8.5 bcf/d Crude & NGL Railcars 10,100 Truck Fleet Barge Fleet Crude & NGL Volumes (8) : PAA Assets (5) 1,930 Trailers 990 Trucks 142 Barges 64 Tugs >4.6 mmb/d (1) As applicable, based on balance sheet data as of 03/31/16, 05/25/16 closing unit price, and dist. paid on 05/13/16. (2) $1.6 billion preferred equity included in PAA Equity Market Cap (3) PAGP Equity Market Cap includes AAP Management units as of 03/31/16. (4) Adjusted EBITDA and Adjusted Net Income Attributable to PAA, which has been abbreviated as Adj. Net Income, are the mid-point of PAA s public guidance furnished via form 8-K on 05/04/16 and exclude selected items impacting comparability. (5) Assets as of 12/31/15. All amounts are approximate and are not adjusted for 2016 asset sales or pending Canadian NGL acquisition. (6) Amount represents net capacity. (7) Amount represents net capacity. Natural gas processing capacity also includes approximately 2.5 Bcf per day for a long-term liquid supply contract. (8) YTD average monthly Transportation segment volumes for period ending 03/31/16. 6
Strong Presence In All Major U.S. And Canadian Crude Oil Production Areas And Substantially All Inland And Coastal Crude Oil Terminal / Interchange Locations PAA Has: 1. The most integrated crude oil pipeline & terminal system in the U.S. 2. Minimal direct exposure to commodity prices 3. Multiple crude oil & NGL projects coming on-stream, supported by pre-funding and long term contracts Plus: Significant incremental capacity to participate in the recovery in U.S. & Canadian volume growth with low / no capex Plus: Synergies that could represent a competitive advantage with respect to industry consolidation Permian Mid- West Canada Rockies Williston Continent Coast Gulf Coast Eagle Ford East Coast Crude Oil Multiple Pipeline Connections - Storage Trucks - Rail - Marine Access N/A N/A - N/A N/A Note: Map includes 3 rd party assets and only most significant PAA assets. Certain PAA assets reflected above are announced or under construction, but not yet in service. 7
Crude Oil Industry Outlook 8
Crude Oil Industry Update The stage is being set for a meaningful recovery in crude oil prices; demand for increased U.S. shale production; surge in drilling & completion activities World petroleum demand is at/near record levels (growing +/- 1mmb/d per year) World production capacity above demand is at/near trough levels Worldwide base decline +/- 4 to 6% (~4 to 6 mmb/d) Global oil supply / demand expected to rebalance at the margin next +/- 12 months E&P and oil field service (OFS) entities ability to respond quickly when called upon has been / is being impaired Not all equipment, labor & locations are equal (current = best of the best) Impediments become more significant the longer activity levels remain low: Steeper near-term production declines Lower or delayed peak production Higher probability for a more severe price response High inventory provides a near-term shock absorber; can be reduced quickly OFS costs likely to increase; drilling & completion efficiencies likely to erode 9
Reduced Activity Levels & Sharp Decline Rates Suggest Production Declines Are Imminent BY Underlying New YE Production Decline Underlying Production Y/Y Production Production Year (mb/d) (mb/d) Decline % (mb/d) Growth (mb/d) (mb/d) Avg Rigs 2012 4,091 (1,035) -25% 2,044 1,009 5,100 1,452 2013 5,100 (1,537) -30% 2,427 890 5,990 1,391 2014 5,990 (1,853) -31% 3,267 1,414 7,404 1,511 2015 7,404 (2,513) -34% 2,200 (312) 7,092 734 2016 7,092 (1,911) -27% 1,073 (838) 6,253 412 Increasingly higher new production volumes required to offset higher annual declines Note: Historical rig data per Baker Hughes and includes both horizontal and vertical rigs 10
Regional Detail 11
Not All Equipment, Labor and Locations Are Equal Ramp Up Time Will Likely Take Longer Than Ramp Down Time Currently operating with / in the best of the best equipment, labor and locations Activity ramp up may involve time delays, increasing OFS costs and performance degradation (longer drill times, execution challenges, delivery delays, etc.; portions of which may be offset by continued improvement in efficiencies from the best of the best ) Directional Illustration Only Rig Drilling & Completion Equipment Labor Location / Technical Expertise Composite Count Quality & Effectiveness Rating Quality & Effectiveness Rating Quality & Effectiveness Rating Midpoint Current 300 10.0 10.0 10.0 10.0 Incremental Rigs Layer 1 200 9.8 to 10.0 9.5 to 10.0 9.5 to 10.0 9.8 Layer 2 100 9.0 to 9.8 8.5 to 9.5 9.0 to 9.5 9.2 Layer 3 100 8.3 to 9.0 7.8 to 8.5 7.8 to 8.8 8.3 Layer 4 100 7.8 to 8.8 7.0 to 7.8 7.3 to 7.8 7.7 Layer 5 100 7.0 to 7.5 6.5 to 7.0 7.0 to 7.3 7.0 Layer 6 100 6.5 to 7.0 6.0 to 6.5 6.5 to 7.0 6.6 1000 Current Rigs 10.0 10.0 10.0 10.0 W/avg Incremental Rigs 8.6 8.1 8.3 8.4 Directional erosion of quality & effectiveness of incremental activity -14% -19% -17% -16% Beyond the first few layers, oilfield service & supply companies may require certainty and higher margins to support recalling / recruiting labor, restocking inventory, returning idled equipment to a ready state, etc. 12
High Inventory Levels Provide A Near Term Buffer But Can Be Meaningfully Reduced In A Short Period of Time Dotted purple lines based on estimates prepared by PAA in late 2015 Full Disclosure: Variances in PAA s forecasts for imports, refinery inputs and other adjustments netted to a small difference. Impact of reduced activity levels relative to PAA s beginning of year assumptions??? Note: Data through May 20, 2016 per DOE weekly data 13
PAA s Positioning In The Current Environment 14
Summary Midstream Outlook Near-Term Expectations Continuation of a competitive environment for new volumes Potential for producer bankruptcies to create disruptions Midstream capital projects likely limited to completion of existing projects future growth to be primarily driven by: Increased utilization of existing assets Asset acquisitions / consolidation and rationalization Midstream profitability will deteriorate for some and increase for others High priced, short-term contracts will expire Differentials, competition and margins will normalize PAA is prepared to withstand an extended period of challenging market conditions and is well positioned to participate in a significant recovery Intermediate / Long-Term Expectations Very constructive intermediate to long-term outlook for the crude oil industry very positive for PAA 15
Defined Resource Base Is Extensive, Drilling & Completion Techniques Proven And PAA s Assets Are Located In All The Right Places It s Not A Question Of If The Resource Gets Developed, But Instead When Yellow highlighted areas represent ~75% of $3-4 B in recent or pending organic growth capital projects Selected Major US Resource Plays ~Area Acreage (millions) ~HZ Wells Drilled ( 09-15) (1) Estimate # of Undrilled Locations ~Drilling Years Permian 15-16 ~9,500 >210,000 ~75 Yrs Eagle Ford 4 ~16,500 >69,000 ~20 Yrs Williston 9 ~10,000 >26,000 ~15 Yrs DJ Basin 4 ~4,000 >22,000 ~17 Yrs -- Ring size is illustrative of scope of YE 2015 activity levels -- Note: Map includes 3 rd party assets and only most significant PAA assets. Certain PAA assets reflected above are announced or under construction, but not yet in service. (1) Assets as of 12/31/15. All amounts are approximate and are not adjusted for 2016 asset sales or pending acquisitions. 16
PAA Is A Leader Across The Entire Crude Oil Midstream Value Chain In Almost Every Region Primarily fee-equivalent merchant activities Primarily fee-based activities Multiple commercial optimization opportunities 17
Illustration OF PAA s Ability To Serve The Industry s Supply Push & Demand Pull Needs Bakken / Canadian Crude to St. James Patoka Cushing Cushing to Broom STACK Diamond Memphis Yellow highlights represent significant recent / ongoing capital investments Permian Jal Midland Colorado City Stack Injection Station SCOOP Scoop Injection Station Wichita Falls Haynesville Longview Caddo Wink Crane McCamey Driver Delek Shreveport Tuscaloosa Mobile Houston Nederland St. James Lyssy Texas City Gardendale Three Rivers Corpus Christi Imports / Exports Note: Map for illustrative purposes and only includes most significant PAA assets. Not all PAA and 3 rd party assets are shown. All amounts are approximate. 18
Substantial Capacity Across The System Leverages PAA To An Industry Recovery Available Capacity >100 mb/d 0-100 mb/d Substantially Full - With Low to No Capex - PAA Handles > 4.6 mmb/d of Crude Oil & NGLs Note: Map includes 3 rd party assets and only most significant PAA assets. Certain PAA assets reflected above are announced or under construction, but not yet in service. Color shading is applied to selected assets in major producing regions. (1) Assets as of 12/31/15. All amounts are approximate. (2) Available capacities on joint venture pipelines are calculated net to PAA s interest. 19
Significant Operating Leverage To North American Crude Oil Production Growth With Low-to-No Incremental Capex Production volume growth in each of the basins can potentially fill a large portion of currently available pipeline capacity PAA captures reasonable share of production growth in each respective basin Supply and Logistics segment has potential for additional margin as a result of a return to a more balanced market Illustrative Adjusted EBITDA Growth Potential Transportation & Facilities (1) (~$600mm) Supply & Logistics (~$400mm) $2.175 B 2016 (G) --------- Volume &/or Margin Recovery ---------> 100% over Time (1) Represents PAA s estimates of cash flow increases over 2016 associated with potential production growth in the U.S. onshore lower 48 and similar assumptions for selected assets in Canada. 20
Financial Overview 21
Capital Structure & Credit Metrics Significant Benefit of $1.6 billion Preferred Equity Raise Capitalization PAA PAGP ($ billions) 12/31/15 3/31/16 12/31/15 3/31/16 Long-term Debt $10.4 $9.2 $10.9 $9.7 Partners' Capital 7.9 9.4 9.2 10.7 Total Book Capitalization $18.3 $18.5 $20.2 $20.4 Credit Stats & Liquidity Target Long-term Debt / Total Book Cap 57% 49% ~50% 54% 48% Total Debt / Total Book Cap (1) 59% 51% ~60% 56% 49% Adj. EBITDA / Interest (2)(3) 5.0x 4.9x >3.3x 4.9x 4.7x Long-term Debt / Adj. EBITDA (4) 4.6x 4.2x ~3.5x-4.0x 4.8x 4.5x Committed Liquidity $2.3 b $3.8 b $2.4 b $3.9 b (1) Includes short-term debt. (2) 2015 PAA and PAGP metrics are calculated using PAA s full-year 2015 adjusted EBITDA ended 12/31/15. 2016 PAA and PAGP metrics are calculated using PAA s full-year 2016 adjusted EBITDA guidance furnished via form 8-K on 5/4/16. (3) PAGP s Q1 interest expense has been annualized for purposes of the 3/31/16 calculation. (4) PAA and PAGP metrics are calculated using PAA s full-year 2016 midpoint guidance adjusted EBITDA furnished via Form 8-K on 5/4/16. 22
PAA: A Track Record Of Commitment & Financial Discipline During A Period Of Substantial Growth ($ billions) $20.0 Total Capitalization $22.0 $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 $8.0 $6.0 $4.0 $2.0 $- ($ billions) Current Target Range $0.7 $1.1 Current Target Range $2.0 $2.3 $4.5 LT Debt to Adj. EBITDA (1) $5.6 $6.0 $5.2 $10.5 $8.7 $8.1 $6.8 $6.5 $7.2 $8.0 $9.9 $15.1 $13.4 $18.2 (WTI $/Bbl) $20.5 $20.9 $120 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 '16 Acquisitions Expansion Average WTI $13.5 $14.4 $18.3 $18.5 $17.0 5.0x 4.5x 4.0x 3.5x 3.0x 2.5x LT Debt / Adj. EBITDA $100 $80 $60 $40 $20 $0 LT Debt to Adjusted EBITDA (1) Although our leverage has been impacted by the current challenging industry environment, we remain committed to our financial strategy and target metrics and expect our leverage ratio will improve and return to within our target range as we realize the benefit of new projects coming on line, coupled with an industry recovery Over this 13+-year period, PAA invested ~$21 billion in capital investments Early/Pre-funding approach allowed PAA to remain within (or favorable to) targeted credit metrics prior to 2015 (1) Adjusted EBITDA based on subsequent year February midpoint guidance. LT Debt amounts for 2009 and 2010 are adjusted to exclude the portion of the 4.25% Sr. Notes that were due 9/2012 and used to fund hedged inventory that would have been classified as short-term debt if funded on our credit facilities. Please see Non-GAAP reconciliations on our website at www.plainsallamerican.com. 23
DCF & Distribution Coverage 12-Year Historical Distribution Coverage ~117% (1) ($ millions) ($/bbl) $1,800 1.6x 1.4x 1.1x 0.88x~0.86x $1,500 $1,200 1.5x $900 1.2x 1.1x 1.1x 1.1x $600 1.7x 1.5x $300 1.2x $0 Crude Oil Price $160 $140 $120 $100 $80 $60 $40 $20 $0 WTI Crude Oil Price Shale Oil Development Era 14% 12% 10% 8% 6% 4% 2% 0% YoY Distribution Growth Distributions Paid Excess DCF Reinvested 12-Year Historical DCF ~$12.4 Billion $1.8 B, 14% (1) Coverage calculated based on 2004 through 2015 actuals. (G) Midpoint of guidance furnished via form 8-K on May 4, 2016. $10.6 B, 86% Yearly Range Yearly Average Crude Price YoY Distribution Growth PAA historically targeted distribution coverage of 105% - 110% and has a long history of retaining excess cash flow (~$1.8 Billion and ~117% over the past 12 years) As a direct result of challenging industry conditions, PAA s 2015/2016 distribution coverage has been less than 100% PAA does not believe sub 1:1 coverage is a sustainable or acceptable practice over the long term and we are committed to returning to positive coverage Currently evaluating targeted coverage levels with a view toward ensuring a prudent and appropriate cushion and reducing future equity markets needs 24
Closing Remarks 25
Key Takeaways PAA has the best, largest and most interconnected crude oil midstream platform in the U.S. and a business model that is proven through the cycles Positive intermediate-to-long term fundamentals Well positioned to manage through a Lower for Longer scenario Significant Liquidity Minimal debt maturities over the next 24 months No material capital commitments beyond 2017 Visibility for incremental cash flow contributions in 2016 & 2017 from project completions backed by MVCs and other contractual support Committed to Investment Grade, maintaining strong capital structure and liquidity, improving current credit metrics and returning coverage >1:1 Significant leverage to a sustained increase in U.S. crude oil production with no-to-low incremental capex 26
Q&A 27