PLAINS GP HOLDINGS LP

Previous wording

PAA’s 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, PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada. PAA’s assets and the services it provides are primarily focused on crude oil and NGL.

Current wording

PAA’s 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 crude oil midstream service providers in North America, PAA owns an extensive network of pipeline transportation, terminalling, storage and gathering assets in key crude oil and NGL producing basins (including the Permian Basin) and transportation corridors and at major market hubs in the United States and Canada. PAA’s assets and the services it provides are primarily focused on crude oil and NGL.

Previous wording

During the first three months of 2024, we recognized net income of $336 million compared to $443 million during the first three months of 2023. Net income for the 2023 period includes favorable impacts from gains on asset sales and the mark-to-market adjustment of the Preferred Distribution Rate Reset Option, contributing to the relative decrease in net income in 2024. For the first quarter of 2024 compared to 2023, more favorable results from our Crude Oil segment were substantially offset by less favorable results from our NGL segment.

Current wording

During the first six months of 2024, we recognized net income of $653 million compared to $776 million during the first six months of 2023. Net income for the 2023 period includes favorable impacts from gains on asset sales and the mark-to-market adjustment of the Preferred Distribution Rate Reset Option, contributing to the relative decrease in net income in 2024. Our Crude Oil segment results were more favorable for the first six months of 2024 compared to 2023 and our NGL segment results were relatively flat year-over-year.

Previous wording

Fluctuations in our consolidated revenues and purchases and related costs are primarily associated with our merchant activities and generally explained in large part by changes in commodity prices. Our crude oil and NGL merchant activities are not directly affected by the absolute level of prices because the commodities that we buy and sell are generally indexed to the same pricing indices. Both product sales revenues and purchases and related costs will fluctuate with market prices; however, the absolute margins related to those sales and purchases will not necessarily have a corresponding increase or decrease. Additionally, product sales revenues include the impact of gains and losses related to derivative instruments used to manage our exposure to commodity price risk associated with such sales and purchases.

Current wording

Fluctuations in our consolidated revenues and purchases and related costs are primarily associated with our merchant activities and are generally explained by changes in commodity prices and the impact of gains and losses related to derivative instruments used to manage our commodity price exposure. Because both product sales revenues and purchases and related costs are generally based off of the same pricing indices, the market price of the commodities will not necessarily have an impact on the absolute margins related to those sales and purchases.

Previous wording

Revenues from services increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to higher pipeline volumes and tariff escalations, as well as the impact of acquisitions.

Current wording

Revenues from services increased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to higher pipeline volumes and tariff escalations, as well as the impact of acquisitions.

Previous wording

The increase in general and administrative expenses for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to (i) higher information systems costs due to ongoing systems integration work and (ii) higher employee-related costs, including an increase in equity-indexed compensation expense (a portion of which is excluded in the calculation of Adjusted EBITDA and Segment Adjusted EBITDA).

Current wording

The increase in general and administrative expenses for the three and six months ended June 30, 2024 compared to the same periods in 2023 was primarily due to (i) higher information systems costs due to ongoing systems conversion and integration work and (ii) higher employee-related costs, including an increase in equity-indexed compensation expense (a portion of which is excluded in the calculation of Adjusted EBITDA and Segment Adjusted EBITDA).

Previous wording

The net gain on asset sales for the three months ended March 31, 2023 was primarily comprised of a gain of approximately $140 million related to the sale of our Keyera Fort Saskatchewan facility in the first quarter of 2023. See Note 7 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional information.

Current wording

The net gain on asset sales for the six months ended June 30, 2023 was primarily comprised of a gain of approximately $140 million related to the sale of our Keyera Fort Saskatchewan facility in the first quarter of 2023. See Note 7 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional information.

Previous wording

The following table summarizes the components impacting Other income/(expense), net (in millions):

Current wording

The following table summarizes the components impacting Other income, net (in millions):

Previous wording

The net favorable income tax variance for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to the tax impact of (i) the Keyera Fort Saskatchewan divestiture in the first quarter of 2023, (ii) lower year-over-year income within our Canadian operations and (iii) lower earnings at PAA on income attributable to PAGP.

Current wording

The net favorable income tax variance for the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to the tax impact of (i) the Keyera Fort Saskatchewan divestiture in the first quarter of 2023 (ii) lower year-over-year income within our Canadian operations as impacted by fluctuations of derivative mark-to-market valuations and (iii) lower earnings at PAA on income attributable to PAGP, partially offset by (iv) higher income tax expense in the second quarter of 2024 associated with Canadian withholding tax on dividends from our Canadian entities to other Plains entities.

Previous wording

Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization (including our proportionate share of depreciation and amortization, including write-downs related to cancelled projects and impairments, of unconsolidated entities), gains and losses on asset sales and gains or losses on investments in unconsolidated entities, adjusted for certain selected items impacting comparability. Adjusted EBITDA attributable to PAA excludes the portion of Adjusted EBITDA that is attributable to noncontrolling interests in consolidated joint venture entities.

Current wording

Adjusted EBITDA is defined as earnings before interest expense, income tax (expense)/benefit, depreciation and amortization (including our proportionate share of depreciation and amortization, including write-downs related to cancelled projects and impairments, of unconsolidated entities), gains and losses on asset sales and gains or losses on investments in unconsolidated entities, adjusted for certain selected items impacting comparability. Adjusted EBITDA attributable to PAA excludes the portion of Adjusted EBITDA that is attributable to noncontrolling interests in consolidated joint venture entities.

Previous wording

(6)Other income/(expense), net on our Condensed Consolidated Statements of Operations, adjusted for selected items impacting comparability (“Adjusted other income/(expense), net”) is included in Adjusted EBITDA and excluded from Segment Adjusted EBITDA.

Current wording

(6)Other income, net on our Condensed Consolidated Statements of Operations, adjusted for selected items impacting comparability (“Adjusted other income/(expense), net”) is included in Adjusted EBITDA and excluded from Segment Adjusted EBITDA.

Previous wording

Our Crude Oil segment operations generally consist of gathering and transporting crude oil using pipelines, gathering systems, trucks and, at times, on barges or railcars, in addition to providing terminalling, storage and other related services utilizing our integrated assets across the United States and Canada. Our assets serve third parties and are also supported by our merchant activities. Our merchant activities include the purchase of crude oil supply and the movement of this supply on our assets or third-party assets to sales locations, including our terminals, third-party connecting carriers, regional hubs or to refineries. Our merchant activities are subject to our risk management policies and may include the use of derivative instruments to manage exposure to commodity price risk and, at times, to provide upside opportunities.

Current wording

Our Crude Oil segment operations generally consist of gathering and transporting crude oil using pipelines, gathering systems, trucks and, at times, on barges or railcars, in addition to providing terminalling, storage and other related services utilizing our integrated assets across the United States and Canada. Our assets provide services to third parties as well as to our merchant activities. Our merchant activities include the purchase of crude oil supply and the movement of this supply on our assets or third-party assets to sales locations, including our terminals, third-party connecting carriers, regional hubs or to refineries. Our merchant activities are governed by our risk management policies.

Previous wording

Crude Oil Segment Adjusted EBITDA increased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to higher tariff volumes on our pipelines, tariff escalations and contributions from acquisitions, partially offset by fewer market-based opportunities.

Current wording

Crude Oil Segment Adjusted EBITDA increased for the three and six months ended June 30, 2024 compared to the same periods in 2023 primarily due to higher tariff volumes on our pipelines, tariff escalations and contributions from acquisitions, partially offset by fewer market-based opportunities.

Previous wording

The following is a more detailed discussion of the significant factors impacting Segment Adjusted EBITDA for the three months ended March 31, 2024 compared to the same period in 2023.

Current wording

The following is a more detailed discussion of the significant factors impacting Segment Adjusted EBITDA for the three and six months ended June 30, 2024 compared to the same periods in 2023.

Previous wording

Net Revenues and Equity Earnings. Our results were favorably impacted by (i) higher volumes across our pipeline systems driven by increased production as well as increased movements from the Rocky Mountain region to Cushing, Oklahoma, (ii) tariff escalations and (iii) contributions from acquisitions.

Current wording

Net Revenues and Equity Earnings. Our results were favorably impacted by (i) volume growth across our pipeline systems driven by increased production as well as increased movements from the Rocky Mountain region to Cushing, Oklahoma, (ii) tariff escalations and (iii) contributions from acquisitions.

Previous wording

Additionally, our results for the three months ended March 31, 2024 compared to 2023 reflect fewer crude oil market-based opportunities.

Current wording

Additionally, our results for the three and six months ended June 30, 2024 compared to 2023 reflect fewer crude oil market-based opportunities.

Previous wording

Field Operating Costs. For the three months ended March 31, 2024 compared to the same period in 2023, we recognized higher expenses associated with (i) employee-related costs primarily resulting from higher average headcount and salaries, (ii) property taxes due to the impact of adjustments received in 2023 and (iii) incremental consolidated operating costs in connection with acquisitions. The unfavorable variance for the three months ended March 31, 2024 compared to 2023 was partially offset by (iv) lower utilities-related costs as a result of lower prices, (v) a decrease in the amount of drag reducing agents used and (vi) decreased costs resulting from lower third-party trucked volumes.

Current wording

Field Operating Costs. For the three and six months ended June 30, 2024 compared to the same periods in 2023, we recognized higher expenses associated with (i) employee-related costs primarily resulting from higher average headcount and salaries, (ii) property taxes due to the impact of favorable adjustments in 2023 and (iii) incremental operating costs associated with acquisitions. The unfavorable variance for the three and six months ended June 30, 2024 compared to 2023 was partially offset by (iv) lower utilities-related costs as a result of lower prices, partially offset by higher volumes, (v) a decrease in the amount of drag reducing agents used and (vi) decreased costs resulting from lower third-party trucked volumes.

Previous wording

The increase in maintenance capital spending for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to timing of routine integrity maintenance.

Current wording

The increase in maintenance capital spending for the three and six months ended June 30, 2024 compared to the same periods in 2023 was primarily due to timing of routine integrity maintenance.

Previous wording

Our NGL segment operations involve natural gas processing and NGL fractionation, storage, transportation and terminalling. Our NGL revenues are primarily derived from a combination of (i) providing gathering, fractionation, storage, and/or terminalling services to third-party customers for a fee, and (ii) extracting NGL mix from the gas stream processed at our Empress straddle plant facility as well as acquiring NGL mix, which is then transported, stored and fractionated into finished products and sold to customers. Our management of our commodity exposure is subject to our risk management policies and may include the use of derivative instruments to mitigate the risk of such exposure and, at times, to provide upside opportunities.

Current wording

Our NGL segment operations involve natural gas processing and NGL fractionation, storage, transportation and terminalling. Our NGL revenues are primarily derived from a combination of (i) providing gathering, fractionation, storage, and/or terminalling services to third-party customers for a fee, and (ii) our merchant activities of extracting NGL mix from the gas stream processed at our Empress straddle plant facility as well as acquiring NGL mix, which is then transported, stored and fractionated into finished products and sold to customers. The commodity exposure associated with our merchant activities is governed by our risk management policies.

Previous wording

Generally, our segment results are impacted by (i) increases or decreases in our NGL sales volumes, (ii) volatility in commodity price differentials, primarily the differential between the price of natural gas and the extracted NGL (“frac spread”), as well as location differentials and time spreads, (iii) the volume of natural gas transported on third-party assets through our Empress straddle plant and (iv) our share of the NGL’s received from a third party straddle plant.

Current wording

Generally, our segment results are impacted by (i) increases or decreases in our NGL sales volumes, (ii) volatility in commodity price differentials, primarily the differential between the price of natural gas and the extracted NGL (“frac spread”), as well as location differentials and time spreads, (iii) the quality and volume of natural gas transported on third-party assets through our Empress straddle plant and (iv) our share of the NGL’s received from a third party straddle plant.

Previous wording

Net Revenues. Net revenues include the impact of derivative activities and long-term inventory costing adjustments, which are excluded from Segment Adjusted EBITDA and thus are reflected as an “Adjustment” in the table above. Excluding such impacts, net revenues decreased for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to (i) lower realized frac spreads, (ii) lower propane and butane sales volumes, and (iii) lower field operating costs recoveries at our Empress straddle plants realized through our commercial agreements.

Current wording

Net Revenues. Net revenues include the impact of derivative activities and long-term inventory costing adjustments, which are excluded from Segment Adjusted EBITDA and thus are reflected as an “Adjustment” in the table above. Excluding such impacts, net revenues increased for the second quarter of 2024 compared to 2023 and were relatively flat for the six months ended June 30, 2024 compared to 2023.

Previous wording

Field Operating Costs. The decrease in field operating costs for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to decreased utilities-related costs, largely as a result of lower prices. This decrease was partially offset by the lower benefit to net revenues of operating cost recoveries realized through commercial agreements.

Current wording

Field Operating Costs. The decrease in field operating costs for the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to decreased utilities-related costs largely as a result of lower prices, partially offset by higher maintenance and integrity costs. The decrease in utilities-related costs was partially offset by the lower benefit to net revenues of operating cost recoveries realized through commercial agreements.

Previous wording

The decrease in maintenance capital spending for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to timing of equipment repairs and replacement projects for certain of our pipeline systems and fractionation facilities.

Current wording

The decrease in maintenance capital spending for the three and six months ended June 30, 2024 compared to the same periods in 2023 was primarily due to timing of equipment repairs and replacement projects for certain of our pipeline systems and fractionation facilities.

Previous wording

As of March 31, 2024, although we had a working capital deficit of $142 million, we had approximately $2.5 billion of liquidity available to meet our ongoing operating, investing and financing needs, subject to continued covenant compliance, as noted below (in millions):

Current wording

As of June 30, 2024, although we had a working capital deficit of $18 million, we had approximately $3.2 billion of liquidity available to meet our ongoing operating, investing and financing needs, subject to continued covenant compliance, as noted below (in millions):

Previous wording

(2)Available capacity under the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility was reduced by outstanding letters of credit issued under these facilities of less than $1 million and $27 million, respectively.

Current wording

(2)Available capacity under the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility was reduced by outstanding letters of credit issued under these facilities of less than $1 million and $39 million, respectively.

Previous wording

(3)Excludes restricted cash of $15 million.

Current wording

(3)Excludes restricted cash of $3 million.

Previous wording

Net cash provided by operating activities for the first three months of 2024 and 2023 was $418 million and $742 million, respectively, and primarily resulted from earnings from our operations. Both periods were also impacted by changes in working capital items. The 2024 period was impacted unfavorably, primarily by margin requirements related to our hedging activities. The 2023 period was impacted favorably, largely associated with reducing inventory levels during the period.

Current wording

Net cash provided by operating activities for the first six months of 2024 and 2023 was $1.070 billion and $1.629 billion, respectively, and primarily resulted from earnings from our operations. Both periods were also impacted by changes in working capital items. The 2024 period was impacted unfavorably, primarily by margin requirements related to our hedging activities. The 2023 period was impacted favorably, largely associated with reducing inventory levels during the period.

Previous wording

(3)Investment capital and maintenance capital, net to our 65% interest in the Permian JV, was approximately $79 million and $53 million, respectively, for the three months ended March 31, 2024, and approximately $58 million and $45 million, respectively, for the three months ended March 31, 2023.

Current wording

(3)Investment capital and maintenance capital, net to our 65% interest in the Permian JV, was approximately $144 million and $109 million, respectively, for the six months ended June 30, 2024, and approximately $141 million and $103 million, respectively, for the six months ended June 30, 2023.

Previous wording

2024 Investment and Maintenance Capital. Total investment capital for the year ending December 31, 2024 is projected to be approximately $465 million ($375 million net to our interest). Approximately half of our projected investment capital expenditures are expected to be invested in the Permian JV assets. Additionally, maintenance capital for 2024 is projected to be approximately $250 million ($230 million net to our interest). We expect to fund our 2024 investment and maintenance capital expenditures primarily with retained cash flow.

Current wording

2024 Investment and Maintenance Capital. Total investment capital for the year ending December 31, 2024 is projected to be approximately $465 million ($375 million net to our interest). Approximately half of our projected investment capital expenditures are expected to be invested in the Permian JV assets. Additionally, maintenance capital for 2024 is projected to be approximately $270 million ($250 million net to our interest). We expect to fund our 2024 investment and maintenance capital expenditures primarily with retained cash flow.

Previous wording

Proceeds from the sale of assets have generally been used to fund our investment capital projects and reduce debt levels. The following table summarizes the proceeds received during the first three months of 2024 and 2023 from sales of assets (in millions):

Current wording

Proceeds from the sale of assets have generally been used to fund our investment capital projects and reduce debt levels. The following table summarizes the proceeds received during the first six months of 2024 and 2023 from sales of assets (in millions):

Previous wording

(1)Represents proceeds, including working capital adjustments, net of transaction costs. The proceeds from divestitures for the three months ended March 31, 2023 were primarily from the sale of our 21% non-operated/undivided joint interest in the Keyera Fort Saskatchewan facility in February 2023. See Note 7 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional discussion of this transaction.

Current wording

(1)Represents proceeds, including working capital adjustments, net of transaction costs. The proceeds from divestitures for the six months ended June 30, 2023 were primarily from the sale of our 21% non-operated/undivided joint interest in the Keyera Fort Saskatchewan facility in February 2023. See Note 7 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for additional discussion of this transaction.

Previous wording

During the three months ended March 31, 2024, we had net borrowings under the PAA commercial paper program of $107 million. The net borrowings resulted primarily from borrowings during the period related to funding needs for capital investments, inventory purchases and other general partnership purposes.

Current wording

During the six months ended June 30, 2024, we had net repayments under the PAA commercial paper program of $433 million. The net repayments resulted primarily from cash flow from operating activities and proceeds from the issuance of PAA’s $650 million, 5.70% senior notes in June 2024, which offset borrowings during the period related to funding needs for capital investments, inventory purchases and other general partnership purposes.

Previous wording

We had no net borrowings or repayments under the PAA credit facilities or commercial paper program during the three months ended March 31, 2023.

Current wording

We had no net borrowings or repayments under the PAA credit facilities or commercial paper program during the six months ended June 30, 2023.

Previous wording

There were no repurchases under the Common Equity Repurchase Program (the “Program”) during the three months ended March 31, 2024 or 2023. The remaining available capacity under the Program as of March 31, 2024 was $198 million.

Current wording

There were no repurchases under the Common Equity Repurchase Program (the “Program”) during the six months ended June 30, 2024 or 2023. The remaining available capacity under the Program as of June 30, 2024 was $198 million.

Previous wording

PAGP Registration Statements. We have filed with the SEC a shelf registration statement that, subject to effectiveness at the time of use, allows us to issue up to a specified amount of equity securities (“PAGP Traditional Shelf”). At March 31, 2024, we had approximately $939 million of unsold securities available. We also have access to a universal shelf registration statement (“PAGP WKSI Shelf”), which provides us with the ability to offer and sell an unlimited amount of equity securities, subject to market conditions and our capital needs. We did not conduct any offerings under the PAGP Traditional Shelf or PAGP WKSI Shelf during the three months ended March 31, 2024.

Current wording

PAGP Registration Statements. We have filed with the SEC a shelf registration statement that, subject to effectiveness at the time of use, allows us to issue up to a specified amount of equity securities (“PAGP Traditional Shelf”). At June 30, 2024, we had approximately $939 million of unsold securities available. We also have access to a universal shelf registration statement (“PAGP WKSI Shelf”), which provides us with the ability to offer and sell an unlimited amount of equity securities, subject to market conditions and our capital needs. We did not conduct any offerings under the PAGP Traditional Shelf or PAGP WKSI Shelf during the six months ended June 30, 2024.

Previous wording

PAA Registration Statements. PAA periodically accesses the capital markets for both equity and debt financing. PAA has filed with the SEC a universal shelf registration statement that, subject to effectiveness at the time of use, allows PAA to issue up to a specified amount of debt or equity securities (“PAA Traditional Shelf”), under which PAA had approximately $1.1 billion of unsold securities available at March 31, 2024. PAA also has access to a universal shelf registration statement (“PAA WKSI Shelf”), which provides it with the ability to offer and sell an unlimited amount of debt and equity securities, subject to market conditions and its capital needs. PAA did not conduct any offerings under the PAA Traditional Shelf or the PAA WKSI Shelf during the three months ended March 31, 2024.

Current wording

PAA Registration Statements. PAA periodically accesses the capital markets for both equity and debt financing. PAA has filed with the SEC a universal shelf registration statement that, subject to effectiveness at the time of use, allows PAA to issue up to a specified amount of debt or equity securities (“PAA Traditional Shelf”), under which PAA had approximately $1.1 billion of unsold securities available at June 30, 2024. PAA did not conduct any offerings under the PAA Traditional Shelf during the six months ended June 30, 2024. PAA also has access to a universal shelf registration statement (“PAA WKSI Shelf”), which provides it with the ability to offer and sell an unlimited amount of debt and equity securities, subject to market conditions and its capital needs. The offering of PAA’s $650 million, 5.70% senior notes in June 2024 was conducted under the PAA WKSI Shelf.

Previous wording

On May 15, 2024, we will pay a quarterly cash distribution of $0.3175 per Class A share ($1.27 per Class A share on an annualized basis) to shareholders of record at the close of business on May 1, 2024 for the period from January 1, 2024 through March 31, 2024, which is unchanged from the distribution per share paid in February of 2024. See Note 6 to our Condensed Consolidated Financial Statements for details of distributions paid during the first three months of 2024.

Current wording

On August 14, 2024, we will pay a quarterly cash distribution of $0.3175 per Class A share ($1.27 per Class A share on an annualized basis) to shareholders of record at the close of business on July 31, 2024 for the period from April 1, 2024 through June 30, 2024, which is unchanged from the distribution per share paid in May of 2024. See Note 6 to our Condensed Consolidated Financial Statements for details of distributions paid during the first six months of 2024.

Previous wording

On May 15, 2024, PAA will pay a quarterly cash distribution of approximately $24.20 per unit to its Series B preferred unitholders of record at the close of business on May 1, 2024 for the period from February 15, 2024 through May 14, 2024.

Current wording

On August 15, 2024 , PAA will pay a quarterly cash distribution of approximately $24.77 per unit to its Series B preferred unitholders of record at the close of business on August 1, 2024 for the period from May 15, 2024 through August 14, 2024.

Previous wording

On May 15, 2024, PAA will pay a quarterly cash distribution of $0.3175 per common unit ($1.27 per unit on an annualized basis) to common unitholders of record at the close of business on May 1, 2024 for the period from January 1, 2024 through March 31, 2024, which is unchanged from the distribution per unit paid in February of 2024.

Current wording

On August 14, 2024, PAA will pay a quarterly cash distribution of $0.3175 per common unit ($1.27 per unit on an annualized basis) to common unitholders of record at the close of business on July 31, 2024 for the period from April 1, 2024 through June 30, 2024, which is unchanged from the distribution per unit paid in May of 2024.

Previous wording

See Note 6 to our Condensed Consolidated Financial Statements for details of distributions paid to noncontrolling interests during the three months ended March 31, 2024.

Current wording

See Note 6 to our Condensed Consolidated Financial Statements for details of distributions paid to noncontrolling interests during the six months ended June 30, 2024.

Previous wording

Purchase Obligations. In the ordinary course of doing business, we purchase crude oil and NGL from third parties under contracts, the majority of which range in term from thirty-day evergreen to five years, with a limited number of contracts with remaining terms extending up to 11 years. We establish a margin for these purchases by entering into various types of physical and financial sale and exchange transactions through which we seek to maintain a position that is substantially balanced between purchases on the one hand and sales and future delivery obligations on the other. We do not expect to use a significant amount of internal capital to meet these obligations, as the obligations will be funded by corresponding sales to entities that we deem creditworthy or who have provided credit support we consider adequate.

Current wording

Purchase Obligations. In the ordinary course of doing business, we purchase crude oil and NGL from third parties under contracts, the majority of which range in term from thirty-day evergreen to five years, with a limited number of contracts with remaining terms extending up to 10 years. We establish a margin for these purchases by entering into various types of physical and financial sale and exchange transactions through which we seek to maintain a position that is substantially balanced between purchases on the one hand and sales and future delivery obligations on the other. We do not expect to use a significant amount of internal capital to meet these obligations, as the obligations will be funded by corresponding sales to entities that we deem creditworthy or who have provided credit support we consider adequate.