Quantitative and Qualitative Disclosures About Market Risk
−Removed: We are exposed to various market risks, including commodity price risk and interest rate risk.
+Added: We are exposed to various market risks, including commodity price risk, interest rate risk and currency exchange rate risk.
We use various derivative instruments to manage such risks and, in certain circumstances, to realize incremental margin during volatile market conditions.
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We utilize crude oil derivatives to hedge commodity price risk inherent in our pipeline, terminalling and merchant activities.
−Removed: Our objectives for these derivatives include hedging anticipated purchases and sales, stored inventory and basis differentials.
+Added: Our objectives for these derivatives include hedging changes in inventory positions associated with our lease gathering activities, anticipated purchases and sales, stored inventory and basis differentials.
We manage these exposures with various instruments including futures, forwards, swaps and options.
−Removed: • Natural gas
−Removed: We utilize natural gas derivatives to hedge commodity price risk inherent in our natural gas processing assets (natural gas purchase component of the frac spread).
−Removed: Additionally, we utilize natural gas derivatives to hedge anticipated operational fuel gas requirements related to our natural gas processing and NGL fractionation plants.
+Added: We utilize power derivatives to hedge anticipated operational requirements related to our crude oil pipelines.
We manage these exposures with various instruments including futures, swaps and options.
−Removed: • NGL and other
−Removed: We utilize NGL derivatives, primarily propane and butane derivatives, to hedge commodity price risk inherent in our commercial activities, including the sale of the individual specification products extracted in our natural gas processing assets (sale of specification NGL products component of the frac spread), as well as other net sales of NGL inventory, held mainly at our owned NGL storage terminals.
−Removed: Our objectives for these derivatives include hedging anticipated purchases and sales and stored inventory.
−Removed: We manage these exposures with various instruments including futures, forwards, swaps and options.
See Note 13 to our Consolidated Financial Statements for further discussion regarding our hedging strategies and objectives.
The fair value of our commodity derivatives and the change in fair value as of December 31, 2025 that would be expected from a 10% price increase or decrease is shown in the table below (in millions):
−Removed: Index to Financial Statements
Fair Value Effect of 10%
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(5) $ 1 $ (1)
−Removed: NGL and other
−Removed: (61) $ (46) $ 46
Total fair value
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In the event of an actual 10% change in near-term commodity prices, the fair value of our derivative portfolio would typically change less than that shown in the table as changes in near-term prices are not typically mirrored in delivery months further out.
+Added: Index to Financial Statements
Interest Rate Risk
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Therefore, from time to time, we use interest rate derivatives to hedge interest rate risk associated with anticipated interest payments and, in certain cases, outstanding debt instruments.
+Added: We did not have any interest rate derivatives as of December 31, 2025.
All of PAA’s senior notes are fixed rate notes and thus are not subject to interest rate risk.
−Removed: Our variable rate debt outstanding at December 31, 2024, approximately $393 million, was subject to interest rate resets that generally occur within one week or less.
+Added: Our variable rate debt outstanding at December 31, 2025, approximately $2.069 billion, was subject to interest rate resets that generally occur within one month or less.
The average interest rate on variable rate debt that was outstanding during the year ended December 31, 2025 was 4.6%, based upon rates in effect during the year.
−Removed: The fair value of our interest rate derivatives was a net asset of $27 million as of December 31, 2024.
−Removed: A 10% increase in the forward SOFR curve as of December 31, 2024 would have resulted in an increase of $13 million to the fair value of our interest rate derivatives.
−Removed: A 10% decrease in the forward SOFR curve as of December 31, 2024 would have resulted in a decrease of $13 million to the fair value of our interest rate derivatives.
−Removed: See Note 12 to our Consolidated Financial Statements for a discussion of our interest rate risk hedging activities.
+Added: See Note 11 to our Consolidated Financial Statements for additional information regarding our debt arrangements.
Series B Preferred Units .
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See Note 12 to our Consolidated Financial Statements for additional information regarding PAA’s Series B preferred unit distributions.
+Added: Currency Exchange Rate Risk
+Added: We use foreign currency derivatives to hedge foreign currency exchange rate risk associated with our exposure to fluctuations in the USD-to-CAD exchange rate.
+Added: The fair value of our foreign currency derivatives was an asset of $8 million as of December 31, 2025.
+Added: A 10% increase in the exchange rate (USD-to-CAD) would have resulted in an increase of $329 million to the fair value of our foreign currency derivatives.
+Added: A 10% decrease in the exchange rate (USD-to-CAD) would have resulted in a decrease of $329 million to the fair value of our foreign currency derivatives.
+Added: See Note 13 to our Consolidated Financial Statements for additional information regarding our currency exchange rate risk hedging.
Financial Statements and Supplementary Data
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.