Plains All American Pipeline, L.P. Reports Third-Quarter 2007 Results



    HOUSTON, November 1 /CNW/ - Plains All American Pipeline, L.P. (NYSE:  PAA)
today reported third-quarter 2007 net income of $98.4 million, or $0.66 per
diluted limited partner unit, compared to third-quarter 2006 net income of
$95.4 million, or $0.89 per diluted limited partner unit. For the first nine
months of 2007, the Partnership reported net income of $287.9 million, or
$2.05 per diluted limited partner unit, compared to net income of $239.1
million, or $2.43 per diluted limited partner unit, for the first nine months
of 2006. The Partnership's basic weighted average units outstanding for the
third quarter of 2007 totaled 116.0 million (116.8 million diluted) compared
to 79.9 million (80.8 million diluted) for the third quarter of 2006.

    The Partnership reported earnings before interest, taxes, depreciation
and amortization ("EBITDA") for the third quarter of 2007 of $183.3 million,
an increase of 32% compared with EBITDA of $138.8 million for the third
quarter of 2006. EBITDA for the first nine months of 2007 was $559.3 million,
an increase of 56% compared with EBITDA of $358.7 million for the first nine
months of 2006. (See the section of this release entitled "Non-GAAP Financial
Measures" and the attached tables for a discussion of EBITDA and other
non-GAAP financial measures, and reconciliations of such measures to the
comparable GAAP measures.)

    "We are pleased with our solid third-quarter operating and financial
results," stated Greg L. Armstrong, Chairman and CEO of Plains All American.
"The Partnership ended the quarter with a strong balance sheet and excellent
liquidity and is well positioned to finance its ongoing organic growth
activities as well as capitalize on attractive acquisition opportunities.
While the Partnership invested approximately $460 million on expansion
projects and acquisitions during the first nine months of the year, long-term
debt remained unchanged. Additionally, as a result of our recent equity
offering and the liquidation of a portion of our contango inventory,
short-term debt has decreased more than $500 million since the beginning of
the year."

    Armstrong also stated that the Partnership increased the midpoint of its
full-year operating and financial guidance, which takes into account the
third-quarter shift in the overall crude oil market structure. In addition,
the midpoint of the Partnership's preliminary adjusted EBITDA baseline
guidance for 2008 is approximately 14% higher than the initial baseline
guidance for 2007 provided in February.

    Reported results include the impact of various items that affect
comparability between reporting periods. Adjusted results exclude selected
items impacting comparability, as further described in the table below. After
excluding such items, the Partnership's third-quarter 2007 adjusted net
income, adjusted net income per diluted limited partner unit and adjusted
EBITDA were $111.5 million, $0.77 and $196.4 million, respectively. Comparable
results for the third quarter of 2006 were $87.8 million, $0.95 and $131.2
million, respectively. Adjusted net income, adjusted net income per diluted
limited partner unit and adjusted EBITDA for the first nine months of 2007
were $351.4 million, $2.60 and $612.0 million, respectively, compared to
$245.1 million, $2.81 and $364.7 million, respectively, for the first nine
months of 2006.

    The following table summarizes selected items that the Partnership
believes impact comparability of financial results between reporting periods:

    
                                  Three Months Ended    Nine Months Ended
                                     September 30,        September 30,
                                 --------------------- -------------------
                                    2007       2006      2007      2006
                                 ---------- ---------- --------- ---------
                                    (In millions, except per unit data)
    Selected items impacting
     comparability
    Equity compensation charge
     (1)                          $   (0.5)  $  (10.3)  $ (37.9)  $ (27.1)
    Cumulative effect of change
     in accounting principle -
     Equity Compensation (2)             -          -         -       6.3
    SFAS 133 mark-to-market
     adjustment (3)                  (12.6)      17.9     (14.8)     14.8
    Deferred income tax expense
     (4)                                 -          -     (10.8)        -
                                 ---------- ---------- --------- ---------
    Selected items impacting
     comparability                   (13.1)       7.6     (63.5)     (6.0)
    Less: GP 2% portion of
     selected items impacting
     comparability                     0.3       (0.2)      1.3       0.1
                                 ---------- ---------- --------- ---------
    LP 98% portion of selected
     items impacting
     comparability                $  (12.8)  $    7.4   $ (62.2)  $  (5.9)
                                 ---------- ---------- --------- ---------
    Impact to basic net income
     per limited partner unit
     (5)                          $  (0.11)  $  (0.06)  $ (0.56)  $ (0.39)
                                 ---------- ---------- --------- ---------
    Impact to diluted net income
     per limited partner unit
     (5)                          $  (0.11)  $  (0.06)  $ (0.55)  $ (0.38)
                                 ---------- ---------- --------- ---------


    (1) The equity compensation charge for the three- and nine-month
     periods ended September 30, 2007 excludes the portion of the equity
     compensation expense represented by grants under the 2006 Plan that,
     pursuant to the terms of the Plan, will be settled in cash only and
     have no impact on diluted units.

    (2) During the first quarter of 2006, we adopted SFAS No. 123(R)
     "Share Based Payment," which requires that the cost resulting from
     all share-based payment transactions be recognized in the financial
     statements at fair value. The cumulative adjustment decreased our
     equity compensation life-to-date accrued expense and related
     liability, and therefore resulted in a non-cash gain of $6.3 million
     in the first quarter of 2006.

    (3) The SFAS No. 133 "Accounting for Derivative Instruments and
     Hedging Activities," as amended ("SFAS 133") charge for the three-
     and nine-month periods ended September 30, 2007, includes a $2.0
     million gain and $1.7 million gain, respectively, related to interest
     rate derivatives, which is included in interest income and other
     income (expense), net but does not impact segment profit.

    (4) Includes the initial cumulative effect of the recent change in
     Canadian tax legislation.

    (5) In periods when the Partnership's net income exceeds the cash
     distribution paid during such periods, the application of Emerging
     Issues Task Force Issue No. 03-06: "Participating Securities and the
     Two Class Method under FASB Statement No 128" ("EITF 03-06") does not
     impact the partnership's aggregate net income or EBITDA, but does
     reduce the Partnership's net income per limited partner unit. The
     application of EITF 03-06 negatively impacted basic and diluted
     earnings per limited partner unit by $0.16 for the three months ended
     September 30, 2006 and $0.31 for the nine months ended September 30,
     2006. The application of EITF 03-06 had no impact for the three and
     nine months ended September 30, 2007.
    

    The following tables present certain selected financial information by
segment for the third quarter reporting periods:

    
                                               Three Months Ended
                                               September 30, 2007
                                      ------------------------------------
                                      Transportation Facilities Marketing
                                        Operations   Operations Operations
                                      -------------- ---------- ----------
                                                 (in millions)

    Revenues (1)                          $   198.1   $   54.0  $ 5,668.0
    Purchases and related costs (1)           (19.7)         -   (5,555.9)
    Field operating costs (excluding
     equity compensation
     (charge)/credit)                         (73.8)     (22.1)     (38.3)
    Equity compensation
     (charge)/credit - operations               0.1          -          -
    Segment G&A expenses (excluding
     equity compensation charge) (2)          (13.9)      (5.2)     (13.2)
    Equity compensation charge -
     general and administrative                (0.5)      (0.3)      (0.3)
    Equity earnings in unconsolidated
     entities                                   1.5        2.3          -
                                      -------------- ---------- ----------
    Segment profit                        $    91.8   $   28.7  $    60.3
                                      -------------- ---------- ----------
    SFAS 133 mark-to-market impact
     (3)                                  $       -   $      -  $   (14.6)
                                      -------------- ---------- ----------
    Maintenance capital                   $     9.2   $    0.2  $     0.5
                                      -------------- ---------- ----------

                                               Three Months Ended
                                               September 30, 2006
                                      ------------------------------------
                                      Transportation Facilities Marketing
                                        Operations   Operations Operations
                                      -------------- ---------- ----------
                                                 (in millions)

    Revenues (1)                          $   134.9   $   21.3  $ 4,430.4
    Purchases and related costs (1)           (17.8)         -   (4,304.8)
    Field operating costs (excluding
     equity compensation
     (charge)/credit)                         (48.2)      (9.5)     (35.2)
    Equity compensation
     (charge)/credit - operations              (1.1)         -          -
    Segment G&A expenses (excluding
     equity compensation charge) (2)          (10.8)      (2.8)     (10.2)
    Equity compensation charge -
     general and administrative                (3.9)      (1.3)      (4.0)
    Equity earnings in unconsolidated
     entities                                   0.2        1.3          -
                                      -------------- ---------- ----------
    Segment profit                        $    53.3   $    9.0  $    76.2
                                      -------------- ---------- ----------
    SFAS 133 mark-to-market impact
     (3)                                  $       -   $      -  $    17.9
                                      -------------- ---------- ----------
    Maintenance capital                   $     5.3   $    1.9  $     1.0
                                      -------------- ---------- ----------
    

    
                                               Nine Months Ended
                                              September 30, 2007
                                     -------------------------------------
                                     Transportation Facilities  Marketing
                                       Operations   Operations Operations
                                     -------------- ---------- -----------
                                                 (in millions)

    Revenues (1)                          $  570.5   $  153.3  $ 13,565.1
    Purchases and related costs (1)          (57.7)         -   (13,168.6)
    Field operating costs (excluding
     equity compensation charge)            (213.4)     (62.3)     (114.9)
    Equity compensation charge -
     operations                               (4.5)      (0.1)       (0.3)
    Segment G&A expenses (excluding
     equity compensation charge) (2)         (37.7)     (14.7)      (39.0)
    Equity compensation charge -
     general and administrative              (16.2)      (5.5)      (14.8)
    Equity earnings in
     unconsolidated entities                   3.6        8.8           -
                                     -------------- ---------- -----------
    Segment profit                        $  244.6   $   79.5  $    227.5
                                     -------------- ---------- -----------
    SFAS 133 mark-to-market impact
     (3)                                  $      -   $      -  $    (16.5)
                                     -------------- ---------- -----------
    Maintenance capital                   $   21.6   $    6.4  $      3.6
                                     -------------- ---------- -----------


                                               Nine Months Ended
                                              September 30, 2006
                                     -------------------------------------
                                     Transportation Facilities  Marketing
                                       Operations   Operations Operations
                                     -------------- ---------- -----------
                                                 (in millions)

    Revenues (1)                          $  383.7    $  54.6  $ 17,788.1
    Purchases and related costs (1)          (54.6)         -   (17,462.5)
    Field operating costs (excluding
     equity compensation charge)            (141.9)     (23.9)      (99.9)
    Equity compensation charge -
     operations                               (2.8)         -        (0.1)
    Segment G&A expenses (excluding
     equity compensation charge) (2)         (30.2)      (9.8)      (28.0)
    Equity compensation charge -
     general and administrative              (10.4)      (3.5)      (10.3)
    Equity earnings in
     unconsolidated entities                   1.0        2.2           -
                                     -------------- ---------- -----------
    Segment profit                        $  144.8    $  19.6  $    187.3
                                     -------------- ---------- -----------
    SFAS 133 mark-to-market impact
     (3)                                  $      -    $     -  $     14.8
                                     -------------- ---------- -----------
    Maintenance capital                   $   11.7    $   3.4  $      2.2
                                     -------------- ---------- -----------


    (1) Includes intersegment amounts. Effective April 1, 2006, we adopted
     EITF 04-13, which impacts the comparability of our revenues and
     purchases. Revenues and purchases for the nine months ended September
     30, 2006 include buy/sell transactions of $4.8 billion. Revenues and
     purchases from such transactions are excluded from the nine-month
     period ended September 30, 2007.

    (2) Segment general and administrative expenses (G&A) reflect direct
     costs attributable to each segment and an allocation of other
     expenses to the segments based on the business activities that
     existed at that time. The proportional allocations by segment require
     judgement by management and will continue to be based on the business
     activities that exist during each period.

    (3) Amounts related to SFAS 133 are included in revenues and impact
     segment profit. The SFAS 133 mark-to-market adjustment is primarily
     based upon crude oil prices at the end of the period and is related
     to the non-effective portion of our cash flow hedges, as well as
     certain derivative contracts that do not qualify under SFAS 133 as
     cash flow hedges. The net gain or loss related to these derivative
     instruments is principally offset by physical positions in future
     periods. The SFAS 133 amount for the three- and nine-month periods
     ended September 30, 2007 excludes a $2.0 million gain and $1.7
     million gain, respectively, related to interest rate derivatives,
     which is included in interest income and other income (expense), net
     but does not impact segment profit.
    

    Excluding selected items impacting comparability, third-quarter 2007
adjusted segment profit from Transportation operations was $92.0 million, 58%
higher than third-quarter 2006 adjusted segment results of $58.3 million.
Transportation volumes for the third quarter of 2007 were 2.8 million barrels
per day versus 2.2 million barrels per day in the third quarter of 2006.

    Third-quarter 2007 adjusted segment profit for Facilities operations was
$28.9 million representing a 181% increase over third-quarter 2006 adjusted
Facilities operations segment profit of $10.3 million, reflecting increased
storage capacity and throughput activity due to the Pacific acquisition and
the completion of new capital projects.

    Marketing operations adjusted segment profit of $75.0 million for the
third quarter of 2007 represents an increase of 20% over the third-quarter
2006 adjusted results of $62.3 million reflecting an expanded asset base,
improved margins in our lease gathering activities and the carryover effect of
favorable market conditions experienced during the first half of 2007.

    The Partnership's basic weighted average units outstanding for the third
quarter of 2007 totaled 116.0 million (116.8 million diluted) as compared to
79.9 million (80.8 million diluted) in last year's third quarter. At September
30, 2007, the Partnership had 116.0 million units outstanding, long-term debt
of $2.6 billion and a long-term debt-to-total capitalization percentage of
43%.

    On October 18, 2007, the Partnership declared a cash distribution of
$0.84 per unit ($3.36 per unit on an annualized basis) on its outstanding
limited partner units. The distribution payable on November 14, 2007
represents an increase of 12.0% over the distribution paid in November 2006
and 1.2% over the distribution paid in August 2007. November's distribution
represents the fourteenth consecutive increase in quarterly distributions for
the Partnership and the twenty-first increase in the last twenty-seven
quarters.

    The Partnership will furnish a current report on Form 8-K, which will
include material in this press release and financial and operational guidance
fourth quarter and full year 2007 as well as preliminary 2008 financial
guidance. A copy of the Form 8-K will be available on the Partnership's
website at www.paalp.com.

    Non-GAAP Financial Measures

    In this release, the Partnership's EBITDA disclosure is not presented in
accordance with generally accepted accounting principles and is not intended
to be used in lieu of GAAP presentations of net income or cash flows from
operating activities. EBITDA is presented because we believe it provides
additional information with respect to both the performance of our fundamental
business activities as well as our ability to meet our future debt service,
capital expenditures and working capital requirements. We also believe that
debt holders commonly use EBITDA to analyze Partnership performance. In
addition, we present selected items that impact the comparability of our
operating results as additional information that may be helpful to your
understanding of our financial results. We consider an understanding of these
selected items impacting comparability to be material to our evaluation of our
operating results and prospects. Although we present selected items that we
consider in evaluating our performance, you should also be aware that the
items presented do not represent all items that affect comparability between
the periods presented. Variations in our operating results are also caused by
changes in volumes, prices and exchange rates, as well as mechanical
interruptions, acquisitions and numerous other factors. These types of
variations are not separately identified in this release, but will be
discussed in management's discussion and analysis of operating results in our
Quarterly Report on Form 10-Q.

    A reconciliation of EBITDA to net income and cash flows from operating
activities for the periods presented is included in the tables attached to
this release. In addition, the Partnership maintains on its website
(www.paalp.com) a reconciliation of all non-GAAP financial information, such
as EBITDA, that it reconciles to the most comparable GAAP measures. To access
the information, investors should click on the "Investor Relations" link on
the Partnership's home page and then the "Non-GAAP Reconciliation" link on the
Investor Relations tab.

    Conference Call

    The Partnership will host a conference call on Friday, November 2, 2007
to discuss the following items:

    
    1.  The Partnership's third-quarter 2007 performance;
    2.  Status of major expansion capital projects and recent acquisition
        activity;
    3.  Capitalization and liquidity;
    4.  Financial and operating guidance for the fourth quarter and full
        year 2007, and preliminary 2008 guidance; and
    5.  The Partnership's outlook for the future.
    

    The call will begin at 10:00 AM (Central). To participate in the call,
please dial 877-709-8150 or, for international callers, 201-689-8354, at
approximately 9:55 AM (Central). No password or reservation number is
required. You may access the slide presentation accompanying the conference
call a few minutes prior to the call under the Conference Call Summaries
portion of the Conference Calls tab of the Investor Relations section of our
website at www.paalp.com.

    Webcast Instructions

    To access the Internet webcast, please go to the Partnership's website at
www.paalp.com, choose "Investor Relations," and then choose "Conference
Calls." The call will be archived on the Partnership's website for a period of
sixty (60) days following the live webcast.

    Telephonic Replay Instructions

    To listen to a telephonic replay of the conference call, please dial
877-660-6853 or, for international callers, 201-612-7415, and enter account
number 232 and replay number 258001. The replay will be available beginning
Friday, November 2, 2007, at approximately 1:00 PM (Eastern) and continue
until 11:59 PM (Eastern) Friday, November 30, 2007.

    Plains All American Pipeline, L.P. is a publicly traded master limited
partnership engaged in the transportation, storage, terminalling and marketing
of crude oil, refined products and liquefied petroleum gas and other natural
gas-related petroleum products. Through its 50% ownership in PAA/Vulcan Gas
Storage LLC, the partnership is also engaged in the development and operation
of natural gas storage facilities. The Partnership is headquartered in
Houston, Texas.

    Forward-Looking Statements

    Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements that involve
certain risks and uncertainties that could cause actual results to differ
materially from results anticipated in the forward-looking statements. These
risks and uncertainties include, among other things: the failure to realize
the anticipated synergies and other benefits of the merger with Pacific
Energy; the success of our risk management activities; environmental
liabilities or events that are not covered by an indemnity, insurance or
existing reserves; maintenance of our credit rating and ability to receive
open credit from our suppliers and trade counterparties; abrupt or severe
declines or interruptions in outer continental shelf production located
offshore California and transported on our pipeline systems; failure to
implement or capitalize on planned internal growth projects; shortages or cost
increases of power supplies, materials or labor; the availability of adequate
third party production volumes for transportation and marketing in the areas
in which we operate, and other factors that could cause declines in volumes
shipped on our pipelines by us and third party shippers; fluctuations in
refinery capacity in areas supplied by our mainlines, and other factors
affecting demand for various grades of crude oil, refined products and natural
gas and resulting changes in pricing conditions or transmission throughput
requirements; the availability of, and our ability to consummate, acquisition
or combination opportunities; our access to capital to fund additional
acquisitions and our ability to obtain debt or equity financing on
satisfactory terms; successful integration and future performance of acquired
assets or businesses and the risks associated with operating in lines of
business that are distinct and separate from our historical operations;
unanticipated changes in crude oil market structure and volatility (or lack
thereof); the impact of current and future laws, rulings and governmental
regulations; the effects of competition; continued creditworthiness of, and
performance by, our counterparties; interruptions in service and fluctuations
in tariffs or volumes on third party pipelines; increased costs or lack of
availability of insurance; fluctuations in the debt and equity markets,
including the price of our units at the time of vesting under our long-term
incentive plans; the currency exchange rate of the Canadian dollar; weather
interference with business operations or project construction; risks related
to the development and operation of natural gas storage facilities; general
economic, market or business conditions; and other factors and uncertainties
inherent in the transportation, storage, terminalling and marketing of crude
oil, refined products and liquefied petroleum gas and other natural gas
related petroleum products discussed in the Partnership's filings with the
Securities and Exchange Commission.

    
    CONSOLIDATED STATEMENTS OF OPERATIONS
    ----------------------------------------------------------------------
    (In millions, except per unit data)


                                 Three Months Ended    Nine Months Ended
                                    September 30,        September 30,
                                 ------------------- ---------------------
                                   2007      2006       2007       2006
                                 --------- --------- ---------- ----------

    REVENUES(1)                  $5,799.0  $4,525.5  $13,946.3  $18,052.6
    COSTS AND EXPENSES
    Purchases and related costs
     (1)                          5,455.2   4,261.5   12,884.4   17,343.3
    Field operating costs           133.4      94.0      394.8      268.6
    General and administrative
     expenses                        33.4      33.0      127.9       92.2
    Depreciation and
     amortization                    42.9      24.2      134.9       67.1
                                 --------- --------- ---------- ----------

        Total costs and expenses  5,664.9   4,412.7   13,542.0   17,771.2
                                 --------- --------- ---------- ----------
    OPERATING INCOME                134.1     112.8      404.3      281.4
    OTHER INCOME/(EXPENSE)
    Equity earnings in
     unconsolidated entities          3.8       1.5       12.4        3.2
    Interest expense                (38.8)    (19.2)    (121.1)     (52.5)
    Interest income and other
     income (expense), net            2.5       0.3        7.7        0.7
                                 --------- --------- ---------- ----------
    Income before tax               101.6      95.4      303.3      232.8
    Current income tax expense       (0.4)        -       (1.3)         -
    Deferred income tax expense      (2.8)        -      (14.1)         -
                                 --------- --------- ---------- ----------
    Income before cumulative
     effect of change in
     accounting principle            98.4      95.4      287.9      232.8
                                 --------- --------- ---------- ----------
    Cumulative effect of change
     in accounting principle            -         -          -        6.3
                                 --------- --------- ---------- ----------
    NET INCOME                   $   98.4  $   95.4  $   287.9  $   239.1
                                 --------- --------- ---------- ----------
    NET INCOME - LIMITED
     PARTNERS                    $   76.8  $   84.6  $   231.3  $   212.7
                                 --------- --------- ---------- ----------
    NET INCOME - GENERAL PARTNER $   21.6  $   10.8  $    56.6  $    26.4
                                 --------- --------- ---------- ----------
    BASIC NET INCOME PER LIMITED
     PARTNER UNIT
    Income before cumulative
     effect of change in
     accounting principle        $   0.66  $   0.90  $    2.06  $    2.37
    Cumulative effect of change
     in accounting principle            -         -          -       0.08
                                 --------- --------- ---------- ----------
    Basic net income per limited
     partner unit                $   0.66  $   0.90  $    2.06  $    2.45
                                 --------- --------- ---------- ----------
    DILUTED NET INCOME PER
     LIMITED PARTNER UNIT
    Income before cumulative
     effect of change in
     accounting principle        $   0.66  $   0.89  $    2.05  $    2.35
    Cumulative effect of change
     in accounting principle            -         -          -       0.08
                                 --------- --------- ---------- ----------
    Diluted net income per
     limited partner unit        $   0.66  $   0.89  $    2.05  $    2.43
                                 --------- --------- ---------- ----------
    BASIC WEIGHTED AVERAGE UNITS
     OUTSTANDING                    116.0      79.9      112.1       77.0
                                 --------- --------- ---------- ----------
    DILUTED WEIGHTED AVERAGE
     UNITS OUTSTANDING              116.8      80.8      113.0       77.8
                                 --------- --------- ---------- ----------

    (1) Revenues and purchases include buy/sell transactions of $4.8
     billion in the three months ended March 31, 2006.
    

    
    OPERATING DATA (1)
    -----------------------------
                                   Three Months Ended   Nine Months Ended
                                     September 30,        September 30,
                                  -------------------- -------------------
                                     2007      2006      2007      2006
                                  ---------- --------- --------- ---------

    Transportation activities
     (Average Daily Volumes,
     thousands of barrels):
       Tariff activities
         All American                     46        50        48        49
         Basin                           397       324       382       323
         Capline                         230       183       232       149
         Line 63 / Line 2000             171       N/A       177       N/A
         Salt Lake City                   59       N/A        62       N/A
         North Dakota/Trenton             93        94        95        88
         West Texas/New Mexico
          area systems (2)               409       416       391       445
         Manito                           72        73        74        70
         Refined products                110        15       110         5
         Other                         1,118       977     1,125       855
                                  ---------- --------- --------- ---------
                                       2,705     2,132     2,696     1,984
       Trucking volumes                  104       103       107       111
                                  ---------- --------- --------- ---------
       Transportation activities
        total                          2,809     2,235     2,803     2,095
                                  ---------- --------- --------- ---------

    Facilities activities
     (Average Monthly Volumes):
       Crude oil, refined
        products, and LPG storage
        (average monthly capacity
        in millions of barrels)         39.6      18.8      36.9      18.8
                                  ---------- --------- --------- ---------
       Natural gas storage, net
        to our 50% interest
        (average monthly capacity
        in billions of cubic
        feet)                           12.9      12.9      12.9      12.4
                                  ---------- --------- --------- ---------
       LPG processing (thousands
        of barrels per day)             20.8      16.3      18.2      11.5
                                  ---------- --------- --------- ---------

       Facilities activities
        total (average monthly
        capacity in millions of
        barrels) (3)                    42.4      21.4      39.6      21.2
                                  ---------- --------- --------- ---------

    Marketing activities (Average
     Daily Volumes, thousands of
     barrels):
       Crude oil lease gathering         679       650       689       639
       Refined products                   14       N/A        10       N/A
       LPG sales                          58        39        78        49
       Waterborne foreign crude
        imported                          82        80        76        59
                                  ---------- --------- --------- ---------
       Marketing activities total        833       769       853       747
                                  ---------- --------- --------- ---------

    (1) Volumes associated with acquisitions represent total volumes for
     the number of days we actually owned the assets divided by the number
     of days in the period.

    (2) The aggregate of multiple systems in the West Texas/New Mexico
     area.

    (3) In order to calculate total facilities activities volume add: (i)
     crude oil, refined products and LPG storage capacity; (ii) natural
     gas storage capacity divided by 6 to account for the 6:1 mcf of gas
     to crude oil barrel ratio; and (iii) LPG processing volumes
     multiplied by the number of days in the period and divided by 1,000
     and the number of months in the period to convert to monthly capacity
     in millions.
    

    
    CONDENSED CONSOLIDATED BALANCE SHEET DATA
    ----------------------------------------------------------------------
    (In millions)

                                              September 30,  December 31,
                                                   2007          2006
                                              -------------- -------------
                                    ASSETS
    Current assets                             $     3,184.6  $    3,157.6
    Property and equipment, net                      4,272.7       3,842.0
    Pipeline linefill in owned assets                  240.5         265.5
    Inventory in third-party assets                     63.0          75.7
    Investment in unconsolidated entities              212.9         183.0
    Goodwill                                         1,059.2       1,026.2
    Other long-term assets, net                        154.3         164.9
                                              -------------- -------------
    Total assets                               $     9,187.2  $    8,714.9
                                              -------------- -------------

                      LIABILITIES AND PARTNERS' CAPITAL
    Current liabilities                        $     3,020.1  $    3,024.7
    Long-term debt under credit facilities
     and other                                           1.2           3.1
    Senior notes, net of unamortized discount        2,623.0       2,623.2
    Other long-term liabilities and deferred
     credits                                           119.7          87.1
                                              -------------- -------------
    Total liabilities                                5,764.0       5,738.1
    Partners' capital                                3,423.2       2,976.8
                                              -------------- -------------
    Total liabilities and partners' capital    $     9,187.2  $    8,714.9
                                              -------------- -------------
    

    
    COMPUTATION OF BASIC AND DILUTED EARNINGS PER LIMITED PARTNER UNIT
    ----------------------------------------------------------------------
    (In millions, except per unit data)

                                   Three Months Ended   Nine Months Ended
                                      September 30,       September 30,
                                   ------------------- -------------------
                                     2007      2006      2007      2006
                                   --------- --------- --------- ---------
    Numerator for basic and
     diluted earnings per limited
     partner unit:
    Net income                     $   98.4   $  95.4   $ 287.9   $ 239.1
    Less: General partner's
     incentive distribution paid      (20.0)     (9.1)    (51.9)    (22.1)
                                   --------- --------- --------- ---------
       Subtotal                        78.4      86.3     236.0     217.0
       Less: General partner 2%
        ownership                      (1.6)     (1.7)     (4.7)     (4.3)
                                   --------- --------- --------- ---------
       Net income available to
        limited partners               76.8      84.6     231.3     212.7
       Less: Pro forma additional
        general partner's
        distribution (1)                  -     (12.6)        -     (23.8)
                                   --------- --------- --------- ---------
       Net income available for
        limited partners under
        EITF 03-06                     76.8      72.0     231.3     188.9
       Less: Limited partner 98%
        portion of cumulative
        effect of change in
        accounting principle              -         -         -      (6.2)
                                   --------- --------- --------- ---------
       Limited partner net income
        before cumulative effect
        of change in accounting
        principle                  $   76.8   $  72.0   $ 231.3   $ 182.7
                                   --------- --------- --------- ---------

    Denominator:
       Basic weighted average
        number of limited partner
        units outstanding             116.0      79.9     112.1      77.0
       Effect of dilutive
        securities:
          Weighted average LTIP
           units                        0.8       0.9       0.9       0.8
                                   --------- --------- --------- ---------
       Diluted weighted average
        number of limited partner
        units outstanding             116.8      80.8     113.0      77.8
                                   --------- --------- --------- ---------

    Basic net income per limited
     partner unit before
     cumulative effect of change
     in accounting principle (1)   $   0.66   $  0.90   $  2.06   $  2.37

    Cumulative effect of change in
     accounting principle per
     limited partner unit (1)             -         -         -     (0.08)
                                   --------- --------- --------- ---------

    Basic net income per limited
     partner unit (1)              $   0.66   $  0.90   $  2.06   $  2.45
                                   --------- --------- --------- ---------

     Diluted net income per
      limited partner unit before
      cumulative effect of change
      in accounting principle (1)  $   0.66   $  0.89   $  2.05   $  2.35

    Cumulative effect of change in
     accounting principle per
     limited partner unit (1)             -         -         -      0.08
                                   --------- --------- --------- ---------

    Diluted net income per limited
     partner unit (1)              $   0.66   $  0.89   $  2.05   $  2.43
                                   --------- --------- --------- ---------

    (1) Reflects pro forma full distribution of earnings under EITF 03-06.
     The application of EITF 03-06 negatively impacted basic and diluted
     earnings per limited partner unit by approximately $0.16 for the
     three months ended September 30, 2006, and $0.31 for the nine months
     ended September 30, 2006. The application of EITF 03-06 had no impact
     for the three and nine months ended September 30, 2007.
    

    
    FINANCIAL DATA RECONCILIATIONS
    ----------------------------------------------------------------------
    (In millions, except per unit data)

                                  Three Months Ended    Nine Months Ended
                                    September 30,         September 30,
                                 --------------------  -------------------
                                    2007      2006       2007      2006
                                 ---------- ---------  --------- ---------
    Earnings before interest,
     taxes, depreciation and
     amortization ("EBITDA")

    Net income reconciliation
    EBITDA                       $   183.3  $  138.8   $  559.3  $  358.7
    Depreciation and
     amortization                    (42.9)    (24.2)    (134.9)    (67.1)
                                 ---------- ---------  --------- ---------
    Earnings before interest and
     taxes ("EBIT")                  140.4     114.6      424.4     291.6
    Interest expense                 (38.8)    (19.2)    (121.1)    (52.5)
    Income tax expense                (3.2)        -      (15.4)        -
                                 ---------- ---------  --------- ---------

    Net income                   $    98.4  $   95.4   $  287.9  $  239.1
                                 ---------- ---------  --------- ---------

    Cash flow from operating
     activities reconciliation
    EBITDA                       $   183.3  $  138.8   $  559.3  $  358.7
    Interest expense                 (38.8)    (19.2)    (121.1)    (52.5)
    Net change in assets and
     liabilities, net of
     acquisitions                    542.1     349.4      491.1    (495.3)
    Other items to reconcile to
     cash flows from operating
     activities:
       Cumulative effect of
        change in accounting
        principle                        -         -          -      (6.3)
       Equity earnings in
        unconsolidated entities,
        net of distributions          (3.3)     (1.5)     (11.1)     (2.1)
       Inventory valuation
        adjustment                       -         -        0.6         -
       Gain on sale of
        investment assets                -         -       (3.9)        -
       Net (gain) / loss on
        foreign currency
        revaluation                   (1.2)      0.3       (3.2)      2.1
       SFAS 133 mark-to-market
        adjustment                    12.6     (17.9)      14.8     (14.8)
       Equity compensation
        charge                         1.0      10.3       41.4      27.1
       Non-cash amortization of
        terminated interest rate
        hedging instruments            0.2       0.4        0.6       1.2
                                 ---------- ---------  --------- ---------

    Net cash provided by (used
     in) operating activities    $   695.9  $  460.6   $  968.5  $ (181.9)
                                 ---------- ---------  --------- ---------


                                  Three Months Ended    Nine Months Ended
                                    September 30,         September 30,
                                 --------------------  -------------------
                                    2007      2006       2007      2006
                                 ---------- ---------  --------- ---------
    Funds flow from operations
     ("FFO")
    Net income                   $    98.4  $   95.4   $  287.9  $  239.1
    Undistributed equity
     earnings in unconsolidated
     entities                         (3.3)     (1.5)     (11.1)     (2.1)
    Depreciation and
     amortization                     42.9      24.2      134.9      67.1
    Deferred income tax expense        2.8         -       14.1         -
    Non-cash amortization of
     terminated interest rate
     hedging instruments               0.2       0.4        0.6       1.2
                                 ---------- ---------  --------- ---------
    FFO                              141.0     118.5      426.4     305.3
    Maintenance capital
     expenditures                     (9.9)     (8.2)     (31.6)    (17.3)
                                 ---------- ---------  --------- ---------

    FFO after maintenance
     capital expenditures        $   131.1  $  110.3   $  394.8  $  288.0
                                 ---------- ---------  --------- ---------
    

    
                                            Three Months    Nine Months
                                                Ended           Ended
                                            September 30,   September 30,
                                           --------------- ---------------
                                            2007    2006    2007    2006
                                           ------- ------- ------- -------

    Net income and earnings per limited
     partner unit excluding selected items
     impacting comparability

    Net income                             $  98.4 $ 95.4  $ 287.9 $ 239.1
    Selected items impacting comparability    13.1   (7.6)    63.5     6.0
                                           ------- ------- ------- -------
    Adjusted net income                    $ 111.5 $ 87.8  $ 351.4 $ 245.1
                                           ------- ------- ------- -------

    Net income available for limited
     partners under EITF 03-06             $  76.8 $ 72.0  $ 231.3 $ 188.9
    Limited partners 98% of selected items
     impacting comparability                  12.8   (7.4)    62.2     5.9
    Pro forma additional general partner
     distribution under EITF 03-06               -   12.6        -    23.8
                                           ------- ------- ------- -------
    Adjusted limited partners net income   $  89.6 $ 77.2  $ 293.5 $ 218.6
                                           ------- ------- ------- -------

    Adjusted basic net income per limited
     partner unit                          $  0.77 $ 0.96  $  2.62 $  2.84
                                           ------- ------- ------- -------

    Adjusted diluted net income per limited
     partner unit                          $  0.77 $ 0.95  $  2.60 $  2.81
                                           ------- ------- ------- -------

    Basic weighted average units
     outstanding                             116.0   79.9    112.1    77.0
                                           ------- ------- ------- -------
    Diluted weighted average units
     outstanding                             116.8   80.8    113.0    77.8
                                           ------- ------- ------- -------



                                            Three Months    Nine Months
                                                Ended           Ended
                                            September 30,   September 30,
                                           --------------- ---------------
                                            2007    2006    2007    2006
                                           ------- ------- ------- -------
    EBITDA excluding selected items
     impacting comparability
    EBITDA                                 $ 183.3 $138.8  $ 559.3 $ 358.7
    Selected items impacting comparability
     (1)                                      13.1   (7.6)    52.7     6.0
                                           ------- ------- ------- -------
    Adjusted EBITDA                        $ 196.4 $131.2  $ 612.0 $ 364.7
                                           ------- ------- ------- -------
    

    
                                              Three Months Ended
                                              September 30, 2007
                                      -----------------------------------
                                      Transportation Facilities Marketing
                                      -------------- ---------- ---------
    2007 Segment profit excluding
     selected items impacting
     comparability
    Reported segment profit                    $91.8      $28.7     $60.3
    Selected items impacting
     comparability of segment profit:
     Equity compensation charge                  0.2        0.2       0.1
     SFAS 133 mark-to-market
      adjustment (2)                               -          -      14.6
                                      -------------- ---------- ---------
    Segment profit excluding selected
     items impacting comparability             $92.0      $28.9     $75.0
                                      -------------- ---------- ---------

                                               Nine Months Ended
                                              September 30, 2007
                                      -----------------------------------
                                      Transportation Facilities Marketing
                                      -------------- ---------- ---------
    2007 Segment profit excluding
     selected items impacting
     comparability
    Reported segment profit                   $244.6      $79.5    $227.5
    Selected items impacting
     comparability of segment profit:
     Equity compensation charge                 19.1        5.1      13.7
     SFAS 133 mark-to-market
      adjustment (2)                               -          -      16.5
                                      -------------- ---------- ---------
    Segment profit excluding selected
     items impacting comparability            $263.7      $84.6    $257.7
                                      -------------- ---------- ---------
    

    
                                              Three Months Ended
                                              September 30, 2006
                                      -----------------------------------
                                      Transportation Facilities Marketing
                                      ------------------------- ---------
    2006 Segment profit excluding
     selected items impacting
     comparability
    Reported segment profit                    $53.3      $ 9.0   $ 76.2
    Selected items impacting
     comparability of segment profit:
     Equity compensation charge                  5.0        1.3      4.0
     SFAS 133 mark-to-market
      adjustment                                   -          -    (17.9)
                                      -------------- ---------- ---------
    Segment profit excluding selected
     items impacting comparability             $58.3      $10.3   $ 62.3
                                      -------------- ---------- ---------

                                               Nine Months Ended
                                              September 30, 2006
                                      -----------------------------------
                                      Transportation Facilities Marketing
                                      ------------------------- ---------
    2006 Segment profit excluding
     selected items impacting
     comparability
    Reported segment profit                   $144.8      $19.6   $187.3
    Selected items impacting
     comparability of segment profit:
     Equity compensation charge                 13.2        3.5     10.4
     SFAS 133 mark-to-market
      adjustment                                   -          -    (14.8)
                                      -------------- ---------- ---------
    Segment profit excluding selected
     items impacting comparability            $158.0      $23.1   $182.9
                                      -------------- ---------- ---------
    

    
    (1) Excludes the deferred income tax expense associated with the
     initial cumulative effect of the recent change in Canadian tax
     legislation as it does not impact EBITDA.

    (2) The SFAS 133 amount for the three- and nine-month periods ended
     September 30, 2007 excludes a $2.0 million gain and $1.7 million
     gain, respectively, related to interest rate derivatives, which is
     included in interest income and other income (expense), net but does
     not impact segment profit.
    




For further information:

For further information: Plains All American Pipeline, L.P., Houston
Executive Vice President and CFO Phil D. Kramer, 713-646-4560 or 800-564-3036
or Manager, Investor Relations Roy I. Lamoreaux, 713-646-4222 or 800-564-3036

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PLAINS ALL AMERICAN PIPELINE, L.P.

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