Market Overview

Plains All American Completes Deleveraging Plan, Updates Financial Policy, Increases Distributions, and Announces Series A & B Distributions

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Plains All American Pipeline, L.P. (NYSE: PAA)
and Plains GP Holdings (NYSE: PAGP)
today announced achievement of Plains' August 2017 deleveraging plan,
updates to its financial policy, an increase to its common unit and
Class A share distributions, and declaration of Series A & B Preferred
Units distributions.

Key elements of today's announcement include:

  • Successful achievement of Plains' August 2017 deleveraging plan and
    associated financial policy review;
  • Further improving PAA's credit profile by lowering its targeted
    long-term debt to Adjusted EBITDA leverage ratio (S&L normalized) by
    0.5x to a range of 3.0 – 3.5x (3.25x midpoint) with the objective of
    achieving mid-triple B equivalent investment grade ratings over time;
  • Establishing long-term sustainable minimum annual distribution
    coverage level of 130% underpinned by predominantly fee-based cash
    flows;
  • Increasing PAA & PAGP's annualized distribution by $0.24 per common
    unit and per Class A share, respectively ($1.44 per common unit and
    per Class A share on an annualized basis), payable May 15, 2019 to
    holders of record on May 1, 2019, which equates to a 20% increase from
    the distributions paid in February 2019;
  • Adoption of an annual cycle for setting the common unit distribution
    level, consistent with the annual planning process; and
  • Intention to increase distributions in the future contingent on
    achieving and maintaining targeted leverage and coverage ratios and
    subject to the annual review process;
    • In the interim, expect +/- 5% annual common unit distribution
      increases over the next couple of years.

"We are pleased to announce the successful completion of our 2017
deleveraging plan and to provide several important updates regarding our
financial policy, including our plans with respect to distributions,"
stated Willie Chiang, CEO of Plains All American. "These actions reflect
a balanced long-term approach focused on further enhancing financial
flexibility and making disciplined investments that increase
distributable cash flow and value per unit, while sustainably increasing
cash returned to equity holders over time. Consistent with those
objectives, we intend to continue to focus on activities to enhance
investment returns and reinforce capital discipline through asset
optimization, joint ventures, potential divestitures and similar
arrangements."

Al Swanson, Executive Vice President and Chief Financial Officer of
Plains All American, added, "Concurrent with the completion of the 2017
deleveraging plan, we have completed a review of our financial policies
and approach to capital allocation, targeted leverage and distribution
management. Our financial policy review involved extensive analysis of a
wide variety of considerations and potential scenarios, including an
assessment of recent, current and anticipated financial market
conditions for energy-related entities. In addition, we received
feedback from investors and other stakeholders and analyzed a number of
additional factors, including the potential tax implications for our
equity holders and the mitigating impact of bonus depreciation that we
intend to take for the next several years. Importantly, today's actions
reflect our dedication to optimizing sustainable unitholder value while
also preserving and enhancing our financial flexibility, further
reducing leverage and improving Plains' credit profile, with an
objective of achieving mid-triple B equivalent credit ratings over time."

Swanson added, "We are taking a long-term approach designed to enhance
per unit value creation by capturing growth through execution of our
current capital program and disciplined pursuit of additional strategic
and capital-efficient projects and joint ventures that protect and
enhance our existing asset network. Consistent with previous
disclosures, we expect to fund the equity portion of our routine growth
capital programs with cash flow in excess of distributions, which
limits, if not eliminates, the need to issue common equity to fund this
growth."

Swanson continued, "We have also established a long-term sustainable
minimum annual distribution coverage level of at least 130%, underpinned
predominantly by fee-based cash flows, but we expect our coverage will
be higher than the minimum level for the next few years as we focus on
improving our financial flexibility and credit ratings. Under the
overarching construct of enhancing sustainable long-term value on a per
unit basis, moving forward, we will consider our positioning, the market
environment and the following four primary components of capital
allocation: leverage reduction, disciplined capital investment,
distribution growth, and opportunistic equity buybacks only if warranted
by market conditions. In the near-to-medium term, we expect
distributions and distribution growth to be our primary method of
returning capital to investors."

With respect to the PAA common unit and PAGP Class A share distribution
at the increased distribution level, this represents a quarterly cash
distribution of $0.36 per common unit and per Class A share,
respectively or $1.44 per common unit/Class A share on an annualized
basis. Additionally, with respect to PAA's Series A Preferred Units, PAA
announced a quarterly cash distribution of $0.525 per Series A Preferred
Unit, or $2.10 on an annualized basis. For its Series B Preferred Units,
PAA announced a semi-annual distribution of $30.625 per Series B
Preferred Unit. All distributions (attributable to common units, Class A
shares and Preferred Units) will be payable on May 15, 2019 to holders
of record at the close of business on May 1, 2019.

Additionally, the PAGP cash distribution is expected to be a non-taxable
return of capital to the extent of a Class A Shareholder's tax basis in
each PAGP Class A Share and a reduction in the tax basis of that Class A
Share. To the extent any cash distribution exceeds a Class A
Shareholder's tax basis, it should be taxable as capital gains.

Plains All American Pipeline, L.P. is a publicly traded master limited
partnership that owns and operates midstream energy infrastructure and
provides logistics services for crude oil, natural gas liquids ("NGL"),
and natural gas. PAA owns an extensive network of pipeline
transportation, terminalling, storage, and gathering assets in key crude
oil and NGL producing basins and transportation corridors and at major
market hubs in the United States and Canada. On average, PAA handles
more than 5 million barrels per day of crude oil and NGL in its
Transportation segment. PAA is headquartered in Houston, Texas. More
information is available at www.plainsallamerican.com.

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

This press release contains forward-looking statements, including
statements about our plans, strategies and objectives for future results
or outcomes. Such statements are based on management's current
expectations and what we believe to be reasonable assumptions; however,
we can give no assurance that future results or outcomes will be
achieved. Various risks, uncertainties and other factors, some of which
may be beyond our control, could cause actual results or outcomes to
differ materially from results or outcomes anticipated in the
forward-looking statements. These risks, uncertainties and other factors
are disclosed in our filings with the Securities and Exchange Commission.

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