Plains All American Pipeline, L.P. (PAA)

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Plains All American Pipeline L.P. (PAA)

Q4 2009 Earnings Call

February 11, 2010; 11:00 am ET

Executives

Greg Armstrong - Chairman & Chief Executive Officer

Harry Pefanis - President & Chief Operating Officer

Al Swanson - Senior Vice President & Chief Financial Officer

Pat Diamond - Vice President of Strategic Planning

Roy Lamoreaux - Director of Investor Relations

Analysts

Darren Horowitz - Raymond James

Yves Siegel - Credit Suisse

Ross Payne - Wells Fargo

Michael Blum - Wells Fargo

Brian Zarahn - Barclays Capital

Selman Akyol - Stifel Nicolaus

John Edwards - Morgan Keegan

Michael Cerasoli - Goldman Sachs

Adam Rothenberg - Zimmer Lucas Partners

Presentation

Operator

Ladies and gentlemen, welcome to Plains All American Pipeline fourth quarter and year end 2009 results conference call. Today’s call in addition to reviewing the results of the prior period, participants will provide forward-looking comments on the partnerships outlook for the future, which may include such words as believes, estimates, expects and anticipates or other words that indicate a forward view.

The partnership intends to avail itself of Safe Harbor precepts that encourage companies to provide this type of information and directs you to the risks and warnings set forth in Plains All American Pipeline’s most recently filed 10-K, 10-Q and 8-K and other current and future filings with the Securities and Exchange Commission.

In addition, the partnership encourages you to visit the website at www.paalp.com, and in particular, the section entitled non-GAAP reconciliations, which presents certain commonly used non-GAAP financial measures such as EBITDA and EBIT, which may be used here today in the prepared remarks or in the Q-and-A session.

This section of the website also reconciles the non-GAAP financial measures to the most directly comparable GAAP financial measures and includes a table of selected items that impact comparability with respect to the Partnership’s reported financial information. In reference during today’s call to adjusted EBITDA, adjusted net income and the like is a reference to the financial measures, excluding the effects of selected items impacting comparability.

Today’s conference will be chaired by Greg L. Armstrong, Chairman and CEO of Plains All American Pipeline. Also participating in the call are Harry Pefanis, Plains All American’s President and COO; and Al Swanson, Plains All American’s Senior Vice President and CFO. Today’s conference will also include a Q-and-A session. Instructions will be given at that time. As a reminder today’s conference is being recorded.

I would now like to turn the conference over to your host, Mr. Greg Armstrong; please go ahead, sir.

Greg Armstrong

Thank you, Cynthia and good morning to everyone. In addition to Harry, and I, and Al we also have several other members of our management team available for the question-and-answer session, including Pat Diamond, our Vice President, responsible for Strategic Planning; and Roy Lamoreaux, Director of Investor Relations.

As a reminder the slide presentation we’ll be referring to in this call is available on our website at www.paalp.com. Yesterday afternoon Plains All American reported fourth quarter and annual financial performance that exceeded the high end of our guidance range. As discussed in our third quarter conference call, PAA’s asset base business model and financial growth strategy were subjected to a number of realized stress tests throughout which we have delivered solid performance.

This trend continued in the fourth quarter and PAA once again delivered strong quarterly results that put a positive exclamation point on an already solid year, validating the balance that exists between our three segments and reinforcing the complimentary nature of our asset base and various business platforms.

Before we dive into the call I want to highlight the main change of our marketing segment to supply and logistics. This change is largely in response to a number of discussions we’ve had with both equity and debt investors over the last year or so. The abbreviated versions of these discussions are the term marketing is commonly understood among our producer and refiner customers as deemed back-to-back margin business where we have no out right commodity price risk.

Instead we are responsible for the logistics and supply related services that involve transporting, the crude or other product for the point of purchase to the point of sale and also for managing any timing or basis differences. These activities involve not only specialized knowledge and skills, but also substantial use of various transportation assets, inventory and line fill, which are significant elements of the services we provide and represent considerable barriers to entry.

For example, in addition to owning or leasing hundreds of trucks, barges, railcars and pipeline space, this segment also owns approximately 10 million barrels of crude oil, in LPG line fill that we classify as a long term asset. This last element alone would represent an entry cost to a competitor of three quarters of $1 billion without factoring in the additional cost of associated infrastructure and related IT systems.

Through discussions with members of the financial community, we now understand the initial perception of the term marketing is often considered synonymous with commodity price exposure, speculation and trading in the conventional Wall Street sense. Over the last year or so, we conducted a number of informal polls asking whether it would be beneficial to change the name to something more descriptive of the fee equivalent logistics activities we conduct within the segment. The overwhelming response was where we should change the name. Accordingly, we have renamed the supply and logistics segment.

I would also mention as noted on the top half of slide three, our natural gas storage subsidiary PNGS has filed a registration statement with the SEC, but it has not yet become effective. As a result both PNGS and PAA are subject to limitations on the information we can discuss in order to remain in compliance with rules and regulations regarding gun jumping.

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