Plains All American Pipeline, L.P. Reports Strong Second Quarter 2007 Results - Net Income Increases 31%; EBITDA Increases 76%



    HOUSTON, Aug. 6 /CNW/ -- Plains All American Pipeline, L.P. (NYSE:   PAA)
today reported second-quarter 2007 net income of $104.8 million, or $0.78 per
diluted limited partner unit, compared to net income for the second quarter of
2006 of $80.3 million, and $0.81 per diluted limited partner unit. These
second-quarter 2007 results represent an increase of 31% and a decrease of 4%,
respectively, compared to second quarter 2006 results. The Partnership's basic
weighted average units outstanding for the second quarter of 2007 totaled
110.5 million (111.2 million diluted) compared to 77.0 million (77.8 million
diluted) for the second quarter of 2006.
    The Partnership reported earnings before interest, taxes, depreciation
and amortization ("EBITDA") for the second quarter of 2007 of $210.2 million,
an increase of 76% compared with EBITDA of $119.6 million for the second
quarter 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.)
    "The second quarter's strong results reflect solid contributions from
each of our business segments and underscore the ability of our assets and our
business model to generate performance above our baseline guidance in
favorable market conditions," stated Greg L. Armstrong, Chairman and CEO of
Plains All American. "Based on these results, our second-half guidance, our
recent distribution increase and our other activities, we believe we are well
positioned to achieve the goals we set for 2007."
    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 second-quarter 2007 adjusted net
income, adjusted EBITDA and adjusted net income per diluted limited partner
unit were $120.2 million, $214.8 million and $0.91, respectively. Comparable
results for the second quarter 2006 were $88.9 million, and $128.2 million and
$1.03, respectively.
    The following table summarizes selected items that the Partnership
believes impact comparability of financial results between reporting periods:



    
       (in millions, except per unit
       data)                             Three Months Ended   Six Months Ended
                                                June 30,          June, 30
                                             2007     2006     2007     2006
    

    
       Selected items impacting
        comparability
       LTIP charge (1)                     $(19.5)   $(6.2)  $(37.4)  $(16.8)
       Cumulative effect of change in
        accounting principle - LTIP (2)        --       --       --      6.3
       SFAS 133 mark-to-market adjustment
        (3)                                  14.9     (2.4)    (2.1)    (3.1)
       Deferred income tax expense (4)      (10.8)      --    (10.8)      --
       Selected items impacting
        comparability                       (15.4)    (8.6)   (50.3)   (13.6)
       Less: GP 2% portion of selected
        items impacting comparability         0.3      0.2      1.0      0.3
       LP 98% portion of selected items
        impacting comparability            $(15.1)   $(8.4)  $(49.3)  $(13.3)
    


    
       Impact to basic net income per
        limited partner unit  (5)          $(0.14)  $(0.22)  $(0.45)  $(0.32)
       Impact to diluted net income per
        limited partner unit  (5)          $(0.13)  $(0.22)  $(0.45)  $(0.32)
    

    
    (1) The Long-Term Incentive Plan ("LTIP") charge for the three month and
        six month periods ended June 30, 2007 excludes the portion of the LTIP
        expense represented by LTIP 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 LTIP 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 three and six month
        periods ended June 30, 2007, includes a $0.3 million loss
        related to fair value hedge of debt instrument which 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 Parnership's net income per limited partner unit.  The
        application of EITF 03-06 negatively impacted basic and diluted
        earnings per limited partner unit by $0.11 for the three months ended
        June 30, 2006 and $0.15 for the six months ended June 30, 2006.  The
        application of EITF 03-06 had no impact on our results for the three
        and six months ended June 30, 2007.
    
    The following tables present certain selected financial information by
segment for the second-quarter reporting periods:


    
                              Three Months Ended       Three Months Ended
                                June 30, 2007            June 30, 2006
                         Transpor- Facili- Market-   Transpor- Facili- Market-
                          tation    ties    ing       tation    ties    ing
                         Operat-  Operat- Operat-     Operat-  Operat- Operat-
                          ions     ions    ions        ions     ions    ions
                                (in millions)              (in millions)
    Revenues (1)         $194.2   $54.2  $3,787.5    $130.9   $21.4  $4,797.4
    Purchases and
     related costs (1)    (20.5)     --  (3,627.2)    (18.6)     --  (4,696.4)
    Field operating
     costs (excluding
     LTIP charge)         (73.2)  (21.3)    (38.4)    (46.8)   (8.9)    (33.1)
    LTIP charge -
     operations            (2.5)   (0.1)     (0.2)     (0.6)     --        --
    Segment G&A expenses
     (excluding LTIP
     charge)  (2)         (11.2)   (4.6)    (12.9)     (9.5)   (4.5)     (7.8)
    LTIP charge -
     general and
     administrative        (8.3)   (3.1)     (7.6)     (2.5)   (1.0)     (2.1)
    Equity earnings in
     unconsolidated
     entities               1.2     3.8        --       0.5     1.1        --
    Segment profit        $79.7   $28.9    $101.2     $53.4    $8.1     $58.0
    SFAS 133 mark-to-
     market impact (3)      $--     $--     $15.2       $--     $--     $(2.4)
    Maintenance capital   $ 9.2   $ 2.4     $ 0.7      $3.4    $0.7      $0.3
    



    
                               Six Months Ended         Six Months Ended
                                 June 30, 2007            June 30, 2006
                        Transpor- Facili- Market-   Transpor- Facili- Market-
                          tation    ties    ing       tation    ties    ing
                         Operat-  Operat- Operat-    Operat-  Operat- Operat-
                          ions     ions    ions       ions     ions    ions
                                (in millions)              (in millions)
    

    
    Revenues (1)         $372.4   $99.3   $7,897.1   $248.8  $33.3  $13,357.7
    Purchases and
     related costs (1)    (38.0)     --   (7,612.7)  (36.8)     --  (13,157.7)
    Field operating
     costs (excluding
     LTIP charge)        (139.6)  (40.2)     (76.6)  (93.7)  (14.4)     (64.7)
    LTIP charge -
     operations            (4.6)   (0.1)      (0.3)   (1.7)     --       (0.1)
    Segment G&A expenses
     (excluding LTIP
     charge)  (2)         (23.8)   (9.5)     (25.8)  (19.4)   (7.0)     (17.8)
    LTIP charge -
     general and
     administrative       (15.7)   (5.2)     (14.5)   (6.5)   (2.2)      (6.3)
    Equity earnings in
     unconsolidated
     entities               2.1     6.5         --     0.8     0.9         --
    Segment profit       $152.8   $50.8     $167.2   $91.5   $10.6     $111.1
    SFAS 133 mark-to-
     market impact (3)      $--     $--      $(1.8)    $--     $--      $(3.1)
    Maintenance capital  $ 12.4   $ 6.2     $  3.1    $6.4    $1.5       $1.2
    

    
    (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 six months ended June 30,
        2006 include buy/sell transactions of $4,761.9 million.  Revenues and
        purchases from such transactions are excluded from the six-month
        period ended June 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 judgment 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 for physical positions in future periods. The
        SFAS 133 amount for the three and six month periods ended June 30,
        2007 excludes a $0.3 million loss related to a fair value hedge
        of a debt instrument, which is included in net income, but does not
        impact segment profit.
    
    Excluding selected items impacting comparability, segment profit from
Transportation operations in the second quarter of 2007 was $89.4 million, 58%
higher than second quarter 2006 segment results of $56.5 million.
Transportation volumes for the second quarter of 2007 were 2.9 million barrels
per day versus 2.1 million barrels per day in the second quarter of 2006.
    Adjusted segment profit for Facilities operations for the second quarter
of 2007 was $31.8 million representing a 249% increase over adjusted
Facilities operations segment profit of $9.1 million for the second quarter of
2006, 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 $92.9 million for the
second quarter of 2007 represents an increase of 49% over the second quarter
2006 results of $62.5 million reflecting an expanded asset base and favorable
market conditions.
    The Partnership realized an approximate $9 million net loss on the sale
of assets during the second quarter of 2007, which is reflected as an increase
in depreciation expense. As a result of recent Canadian tax legislation that
may apply to a portion of PAA's Canadian activities, the Partnership also
recorded a $10.8 million deferred tax provision related to the cumulative
effect of this tax, which is primarily attributable to prior years.
    The Partnership's basic weighted average units outstanding for the second
quarter 2007 totaled 110.5 million (111.2 million diluted) as compared to 77.0
million (77.8 million diluted) in last year's second quarter. At June 30,
2007, the Partnership had approximately 116.0 million units outstanding, long-
term debt of $2.6 billion and a long-term debt-to-total capitalization
percentage of 44%.
    On July 19, 2007, the Partnership declared a cash distribution of $0.83
per unit ($3.32 per unit on an annualized basis) on its outstanding limited
partner units.  The distribution will be payable on August 14, 2007, and
represents an increase of 14.5% over the distribution paid in August 2006 and
2.2% over the distribution paid in May 2007.  This represents the 13th
consecutive increase in quarterly distributions for the Partnership and the
20th increase in the last twenty-six 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
for the third and fourth quarter and full year 2007. A copy of the Form 8-K
will be available on the Partnership's website at http://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
(http://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 Tuesday, August 7, 2007 to
discuss the following items:

    
    1. The Partnership's second quarter 2007 performance;
    2. Status of major expansion capital projects and recent acquisition
       activity;
    3. Capitalization, liquidity and recent financing activities;
    4. Financial and operating guidance for the third quarter and full year
       2007; 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.
    
    Webcast Instructions
    
    To access the Internet webcast, please go to the Partnership's website at
http://www.paalp.com, choose "Investor Relations," and then choose "Conference
Calls." Following the live webcast, the call will be archived for a period of
sixty (60) days on the Partnership's website.
    
    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 248168.  The replay will be available beginning Tuesday,
August 7, 2007, at approximately 1:00 PM (Eastern) and continue until 11:59 PM
(Eastern) Monday, August 13, 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 also develops and operates 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.


    
    PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
    FINANCIAL SUMMARY (unaudited)
    

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

    
                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                        2007      2006      2007      2006
    

    REVENUES(1)                       $3,917.8  $4,892.0  $8,147.3  $13,527.1

    
    COSTS AND EXPENSES
    Purchases and related costs (1)    3,529.6   4,657.3   7,429.2   13,081.8
    Field operating costs                135.7      89.4     261.4      174.6
    General and administrative
     expenses                             47.7      27.4      94.5       59.2
    Depreciation and amortization         52.1      21.3      92.0       42.9
    

    Total costs and expenses         3,765.1   4,795.4   7,877.1   13,358.5

    OPERATING INCOME                     152.7      96.6     270.2      168.6

    
    OTHER INCOME/(EXPENSE)
    Equity earnings in unconsolidated
     entities                              5.0       1.6       8.6        1.7
    Interest expense                     (41.2)    (18.0)    (82.3)     (33.3)
    Interest income and other income
     (expense), net                        0.4       0.1       5.2        0.4
    Income before tax                    116.9      80.3     201.7      137.4
    Current income tax expense            (0.7)       --      (0.8)        --
    Deferred income tax expense          (11.4)       --     (11.4)        --
    Income before cumulative effect
     of change in accounting
     principle                           104.8      80.3     189.5      137.4
    

    
    Cumulative effect of change in
     accounting principle                   --        --        --        6.3
    

    NET INCOME                          $104.8     $80.3    $189.5     $143.7

    NET INCOME - LIMITED PARTNERS        $86.3     $71.4    $154.4     $128.2

    NET INCOME - GENERAL PARTNER         $18.5      $8.9     $35.1      $15.5


    
    BASIC NET INCOME PER LIMITED
     PARTNER UNIT
    Income before cumulative effect
     of change in accounting
     principle                           $0.78     $0.82     $1.40      $1.47
    Cumulative effect of change in
     accounting principle                   --        --        --       0.08
    Basic net income per limited
     partner unit                        $0.78     $0.82     $1.40      $1.55
    

    
    DILUTED NET INCOME PER LIMITED
     PARTNER UNIT
    Income before cumulative effect
     of change in accounting
     principle                           $0.78     $0.81     $1.39      $1.45
    Cumulative effect of change in
     accounting principle                   --        --        --       0.08
    Diluted net income per limited
     partner unit                        $0.78     $0.81     $1.39      $1.53
    

    
    BASIC WEIGHTED AVERAGE UNITS
     OUTSTANDING                         110.5      77.0     109.9       75.5
    

    
    DILUTED WEIGHTED AVERAGE UNITS
     OUTSTANDING                         111.2      77.8     110.9       76.3
    

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



    
    PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
    FINANCIAL SUMMARY (unaudited)
                                         Three Months Ended   Six Months Ended
                                                June 30,          June 30,
    OPERATING DATA (1)                       2007     2006     2007     2006
    

    
    Transportation activities (Average
     Daily Volumes, thousands of barrels):
     Tariff activities
      All American                             47       53       48       48
      Basin                                   407      330      374      322
      Capline                                 231      178      233      132
      Line 63 / Line 2000                     181      N/A      181      N/A
      Salt Lake City                           64      N/A       63      N/A
      North Dakota/Trenton                     98       87       96       85
      West Texas/New Mexico area systems (2)  395      478      381      460
      Manito                                   74       73       74       69
      Refined products                        105      N/A      110      N/A
      Other                                 1,170      802    1,131      792
                                            2,772    2,001    2,691    1,908
    Trucking volumes                          107      103      108      114
    Transportation activities total         2,879    2,104    2,799    2,022
    

    
    Facilities activities (Average
     Monthly Volumes):
     Crude oil, refined products, and LPG
      storage (average monthly capacity in
      millions of barrels)                   36.0     19.0     35.6     18.7
     Natural gas storage, net to our 50%
      interest (average monthly capacity
      in billions of cubic feet)             12.9     12.9     12.9     12.2
     LPG processing (thousands of barrels
      per day)                               20.0     18.0     16.9      9.1
    

    
     Facilities activities total (average
      monthly capacity in millions of
      barrels) (3)                           38.8     21.7     38.3     21.0
    

    
    Marketing activities (Average Daily
     Volumes, thousands of barrels):
     Crude oil lease gathering                707      652      694      637
     Refined Products                          13      N/A        8      N/A
     LPG sales                                 45       25       89       54
     Waterborne foreign crude imported         78       43       72       50
     Marketing activities total               843      720      863      741
    


    
    (1) Volumes associated with acquisitions represent total volumes
        transported 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 to convert to
        monthly volumes in millions.
    



    
    CONDENSED CONSOLIDATED BALANCE SHEET DATA
    (in millions)
    

    
                                                  June 30,        December 31,
                                                     2007              2006
                   ASSETS
    Current assets                                $3,462.4          $3,157.6
    Property and equipment, net                    4,086.8           3,842.0
    Pipeline linefill in owned assets                248.3             265.5
    Inventory in third-party assets                   64.1              75.7
    Investment in unconsolidated entities            200.1             183.0
    Goodwill                                       1,045.5           1,026.2
    Other long-term assets, net                      157.0             164.9
    

    Total assets                                  $9,264.2          $8,714.9

    
      LIABILITIES AND PARTNERS' CAPITAL
    Current liabilities                           $3,115.7          $3,024.7
    Long-term debt under credit
     facilities and other                              1.2               3.1
    Senior notes, net of unamortized discount      2,623.1           2,623.2
    Other long-term liabilities and
     deferred credits                                124.6              87.1
    

    
    Total liabilities                              5,864.6           5,738.1
    Partners' capital                              3,399.6           2,976.8
    

    Total liabilities and partners' capital       $9,264.2          $8,714.9




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

    
                                       Three Months Ended  Six Months Ended
                                               June 30,         June 30,
                                            2007    2006     2007     2006
    Numerator for basic and diluted
     earnings per limited partner unit:
    Net income                            $104.8   $80.3   $189.5   $143.7
    Less: General partner's incentive
     distribution paid                     (16.7)   (7.4)   (32.0)   (12.9)
      Subtotal                              88.1    72.9    157.5    130.8
      Less: General partner 2% ownership    (1.8)   (1.5)    (3.1)    (2.6)
      Net income available to limited
       partners                             86.3    71.4    154.4    128.2
      Less: Pro forma additional general
       partner's distribution (1)             --    (8.2)      --    (11.2)
    

    
      Net income available for limited
       partners under EITF 03-06            86.3    63.2    154.4    117.0
      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      $86.3   $63.2   $154.4   $110.8
    


    
    Denominator:
     Basic weighted average number of
      limited partner units outstanding    110.5    77.0    109.9     75.5
     Effect of dilutive securities:
      Weighted average LTIP units            0.7     0.8      1.0      0.8
     Diluted weighted average number of
      limited partner units outstanding    111.2    77.8    110.9     76.3
    

    
     Basic net income per limited
      partner unit before cumulative
      effect of change in accounting
      principle (1)                        $0.78   $0.82    $1.40    $1.47
     Cumulative effect of change in
      accounting principle per limited
      partner unit (1)                        --      --       --     0.08
     Basic net income per limited
      partner unit (1)                     $0.78   $0.82    $1.40    $1.55
    

    
     Diluted net income per limited
      partner unit before cumulative
      effect of change in accounting
      principle (1)                        $0.78   $0.81    $1.39    $1.45
     Cumulative effect of change in
      accounting principle per limited
      partner unit (1)                        --      --       --     0.08
     Diluted net income per limited
      partner unit (1)                     $0.78   $0.81    $1.39    $1.53
    

    
    (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 $0.11 for
        the three months ended June 30, 2006, and $0.15 for the six months
        ended June 30, 2006.  The application of EITF 03-06 had no impact on
        our results for the three and six months ended June 30, 2007.
    



    
    FINANCIAL DATA RECONCILIATIONS
    (in millions, except per unit data)
    

    
                                           Three Months      Six Months
                                              Ended            Ended
                                             June 30,         June 30,
                                          2007     2006    2007     2006
    Earnings before interest, taxes,
     depreciation and amortization
     ("EBITDA")
    

    
    Net income reconciliation
    EBITDA                              $210.2   $119.6  $376.0   $219.9
    Depreciation and amortization        (52.1)   (21.3)  (92.0)   (42.9)
    Earnings before interest and taxes
     ("EBIT")                            158.1     98.3   284.0    177.0
    Interest expense                     (41.2)   (18.0)  (82.3)   (33.3)
    Income tax expense                   (12.1)      --   (12.2)      --
    

    Net income                          $104.8    $80.3  $189.5   $143.7

    
    Cash flow from operating activities
     reconciliation
    EBITDA                              $210.2   $119.6  $376.0   $219.9
    Interest expense                     (41.2)   (18.0)  (82.3)   (33.3)
    Net change in assets and
     liabilities, net of acquisitions   (268.9)  (294.2)  (51.0)  (843.0)
    Other items to reconcile to cash
     flows from operating activities:
      Cumulative effect of change in
       accounting principle                 --       --      --     (6.3)
      Equity earnings in unconsolidated
       entities                           (4.4)    (1.6)   (7.8)    (1.7)
      Inventory valuation adjustment      (0.4)      --     0.6       --
      Gain on sale of investment assets     --       --    (3.9)      --
      Net (gain) / loss on foreign
       currency revaluation               (1.8)     0.9    (2.0)     1.8
      SFAS 133 mark-to-market adjustment (14.9)     2.4     2.1      3.1
      LTIP charge                         21.8      6.2    40.4     16.8
      Non-cash amortization of terminated
       interest rate hedging instruments   0.2      0.4     0.4      0.8
    

    
    Net cash provided by (used in)
     operating activities               $(99.4) $(184.3) $272.5  $(641.9)
    


    
                                             Three Months      Six Months
                                                Ended            Ended
                                               June 30,         June 30,
                                            2007     2006    2007     2006
    Funds flow from operations ("FFO")
    Net income                            $104.8    $80.3  $189.5   $143.7
    Undistributed equity earnings in
     unconsolidated entities                (4.4)    (0.9)   (7.8)    (0.6)
    Depreciation and amortization           52.1     21.3    92.0     42.9
    Deferred income tax expense             11.4       --    11.4       --
    Non-cash amortization of terminated
     interest rate hedging instruments       0.2      0.4     0.4      0.8
    FFO                                    164.1    101.1   285.5    186.8
    Maintenance capital expenditures       (10.9)    (4.4)  (21.7)    (9.1)
    

    
    FFO after maintenance capital
     expenditures                         $153.2    $96.7  $263.8   $177.7
    



    
    FINANCIAL DATA RECONCILIATIONS (continued)
    (in millions, except per unit data)
    

    
                                      Three Months Ended  Six Months Ended
                                             June 30,          June 30,
                                          2007     2006     2007     2006
    

    
    Selected items impacting
     comparability
    LTIP charge (1)                     $(19.5)   $(6.2)  $(37.4)  $(16.8)
    Cumulative effect of change in
     accounting principle - LTIP (2)        --       --       --      6.3
    SFAS 133 mark-to-market adjustment
     (3)                                  14.9     (2.4)    (2.1)    (3.1)
    Deferred income tax expense (4)      (10.8)      --    (10.8)      --
    Selected items impacting
     comparability                       (15.4)    (8.6)   (50.3)   (13.6)
    Less: GP 2% portion of selected
     items impacting comparability         0.3      0.2      1.0      0.3
    LP 98% portion of selected items
     impacting comparability            $(15.1)   $(8.4)  $(49.3)  $(13.3)
    


    
    Impact to basic net income per
     limited partner unit  (5)          $(0.14)  $(0.22)  $(0.45)  $(0.32)
    Impact to diluted net income per
     limited partner unit  (5)          $(0.13)  $(0.22)  $(0.45)  $(0.32)
    

    
    (1) The LTIP charge for the three month and six month periods ended June
        30, 2007 excludes the portion of the LTIP expense represented by LTIP
        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
        LTIP 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) For three and six month periods ended June 30, 2007, includes a $0.3
        million loss related to a fair value hedge of a debt instrument
        which 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 $0.11 for the three months ended
        June 30, 2006 and $0.15 for the six months ended June 30,
        2006. The application of EITF 03-06 had no impact on our results for
        the three and six months ended June 30, 2007.
    


    
    FINANCIAL DATA RECONCILIATIONS (continued)
    (in millions, except per unit data)
    

    
                                        Three Months Ended    Six Months Ended
                                               June 30,          June 30,
                                            2007     2006     2007     2006
    

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

    
    Net income                            $104.8    $80.3   $189.5   $143.7
    Selected items impacting
     comparability                          15.4      8.6     50.3     13.6
    Adjusted net income                   $120.2    $88.9   $239.8   $157.3
    

    
    Net income available for limited
     partners under EITF 03-06             $86.3    $63.2   $154.4   $117.0
    Limited partners 98% of selected
     items impacting comparability          15.1      8.4     49.3     13.3
    Pro forma additional general
     partner distribution under EITF
     03-06                                    --      8.2      --     11.2
    Adjusted limited partners net
     income                               $101.4    $79.8   $203.7   $141.5
    

    
    Adjusted basic net income per
     limited partner unit                  $0.92    $1.04    $1.85    $1.87
    

    
    Adjusted diluted net income per
     limited partner unit                  $0.91    $1.03    $1.84    $1.85
    

    
    Basic weighted average units
     outstanding                           110.5     77.0    109.9     75.5
    Diluted weighted average units
     outstanding                           111.2     77.8    110.9     76.3
    



    
    FINANCIAL DATA RECONCILIATIONS (continued)
     (in millions, except per unit data)
    

    
                                  Three Months Ended         Six Months Ended
                                         June 30,                June 30,
                                       2007    2006            2007    2006
    EBITDA excluding selected items
     impacting comparability
    EBITDA                           $210.2  $119.6          $376.0  $219.9
    Selected items impacting
     comparability (1)                  4.6     8.6            39.5    13.6
    Adjusted EBITDA                  $214.8  $128.2          $415.5  $233.5
    



    
                            Three Months Ended           Six Months Ended
                               June 30, 2007               June 30, 2007
                       Transpo-   Facil-   Mark-   Transpo-   Facil-   Mark-
                       rtation    ities    eting   rtation    ities    eting
    2007 Segment
     profit
     excluding
     selected
     items
     impacting
     comparability
    Reported
     segment profit    $79.7      $28.9   $101.2    $152.8    $50.8    $167.2
    Selected items
     impacting
     comparability
     of segment
     profit:
      LTIP charge        9.7        2.9      6.9      18.9      4.9      13.6
      SFAS 133
       mark-to-
       market
       adjustment (2)     --         --    (15.2)       --       --       1.8
    Segment profit
     excluding
     selected
     items
     impacting
     comparability     $89.4      $31.8    $92.9    $171.7    $55.7    $182.6
    




    
                          Three Months Ended            Six Months Ended
                            June 30, 2006                 June 30, 2006
                       Transpo-   Facil-   Mark-   Transpo-   Facil-   Mark-
                       rtation    ities    eting   rtation    ities    eting
    2006 Segment
     profit
     excluding
     selected items
     impacting
     comparability
    Reported segment
     profit            $53.4       $8.1    $58.0      $91.5   $10.6    $111.1
    Selected items
     impacting
     comparability
     of segment
     profit:
      LTIP charge        3.1        1.0      2.1        8.2     2.2       6.4
      SFAS 133
       mark-to-market
       adjustment         --         --      2.4         --      --       3.1
    Segment profit
     excluding
     selected items
     impacting
     comparability     $56.5       $9.1    $62.5      $99.7   $12.8    $120.6
    

    (1) Excludes deferred income tax expense as it does not impact EBITDA.

    
    (2) The SFAS 133 amount for the three and six month periods ended June 30,
        2007 excludes a $0.3 million loss related to a fair value hedge
        of a debt instrument, which is included in interest income and other
        income (expense), net but does not impact segment profit.
    




For further information:

For further information: Phil D. Kramer, Executive Vice President and
CFO,  +1-713-646-4560, 800-564-3036, or Roy I. Lamoreaux, Manager, Investor
Relations,  +1-713-646-4222, 800-564-3036, both of Plains All American
Pipeline, L.P. Web Site: http://www.paalp.com/

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PLAINS ALL AMERICAN PIPELINE, L.P.

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