Transcript No Slide Title

IPAA Annual Meeting 2007
Exploring The MLP Market
San Antonio, Texas
November 9, 2007
Forward-Looking Statements &
Non-GAAP Financial Measures Disclosure

This presentation contains forward-looking statements, including, in particular,
statements about the plans, strategies and prospects of Plains All American
Pipeline, L.P. (“the Partnership” or “PAA”). These forward-looking statements are
based on the Partnership’s current assumptions, expectations and projections
about future events.

Although the Partnership believes that the expectations reflected in these forwardlooking statements are reasonable, the Partnership can give no assurance that
these expectations will prove to be correct or that synergies or other benefits
anticipated in the forward-looking statements will be achieved. Important factors,
some of which may be beyond the Partnership’s control, that could cause actual
results to differ materially from management’s expectations are disclosed in the
Partnership’s most recent 10-K, 10-Q and 8-Ks filed with the Securities and
Exchange Commission.

This presentation also contains non-GAAP financial measures, such as EBITDA.
For a presentation of the most directly comparable GAAP measures and a
reconciliation of the two as well as additional detail regarding selected items
impacting comparability, you can visit our website at www.paalp.com. Click on the
“Investor Relations” section on our homepage followed by the “Non-GAAP
Reconciliations” link. You will also find such reconciliations at the end of this
presentation.
Disclaimer

Plains All American Pipeline, L.P. and its affiliates do not provide tax, legal or any
other advice and the information contained herein is not intended to be, nor
should it be construed as, tax, legal or any other advice or the basis of tax, legal
or any other advice. Investors should consult their own tax, legal or other
advisors when considering an investment in MLPs.

This presentation does not represent a recommendation to undertake
transactions in MLPs, and is provided as a courtesy, and for informational
purposes only. This presentation is intended to provide a broad overview of
MLPs, and does not contain, or purport to contain, the level of detail necessary to
give sufficient basis to an investment decision with respect to any specific
security by any one person.

Some or all of the securities discussed in this presentation may be speculative or
high risk or otherwise unsuitable for many investors. Investors must make their
own determination as to the suitability of such investments, based on factors
including their investment objectives, financial position, liquidity needs, tax
status and level of risk tolerance. It should be noted that investment involves risk,
including the risk of capital loss.

This presentation does not constitute, and does not represent to be, an offer to
buy or sell a security or a solicitation to do so.
Exploring the MLP Market
Panel Discussion Points:
 Factors Considered in Selecting an MLP Structure
 Benefits of Becoming an MLP
 Lessons Learned
Presentation Outline:
1. Overview of PAA Today
2. PAA Entry into MLP Arena
3. MLP Fundamentals
 Overview of an MLP
 Overview of MLP History
4. Selected Observations and Lessons Learned
Enterprise Value of Selected MLPs
(millions)
$20,000
PAA
$15,000
$10,000
E&P MLPs
$5,000
$0
P
EN P
E
EV Y
C
LG
P
CE P
E
BB
N
AT
NE
LI P
L
TC
L
SX
L
BP
P
M
M
NS
P
TP
P
BW
P
EE
KS
O
A
PA
P
ET
P
KM
D
EP
Equity Market Cap
Source: SEC Filings & Bloomberg
Note: Unit Prices as of 11/05/07; excludes equity value of general partner
LT Debt
Plains All American Profile (NYSE: PAA)
Operational Metrics
Aggregate Size

Total Assets
(9/30/07)
$9.2 B

Book Equity (9/30/07)
$3.4 B

Book Cap.
$6.0 B
(9/30/07)

Enterprise Value *
$8.8 B

Equity Market Cap. *
$6.2 B

Fortune 500 Rank

Unitholders
103

Barge Fleet (Settoon)

~70,000
* Unit price as of November 5, 2007; excludes value of GP.

Public Guidance – Midpoint (1)

2007 Adjusted EBITDA
$787.0 MM

2007 Adjusted Net Income $441.6 MM
Assets(2):
Pipelines (active miles)
Tankage
LPG Railcars
Truck Fleet

Crude, Product &
LPG Volumes:
Geographic footprint:
Domestic
Canada
Employees
~20,000
~64 MMBbls
~1,300
~580 trucks
~970 trailers
~62 barges
~32 tugs
>3.0 MMBbl/d
>40 States
5 Provinces
~2,900
(1)
EBITDA and Net Income are the midpoint of PAA’s public guidance furnished via 8-K on November 1, 2007 and
exclude selected items impacting comparability.
(2)
Includes owned or leased assets as of 5/30/07
PAA’s Four Major Growth Platforms
Crude Oil
Refined Products
Transportation, Facilities & Marketing
Producers
Refiners
Transportation, Facilities & Marketing
Refineries
Gas
Stations
Pipeline
Barge
Truck
Common Carrier
Pipeline
Pipeline
Pipeline Gathering
Injection Station
Barge
Pipeline
Terminal /
Storage /
Exchange
Location
Bulk Storage
Terminal
Storage
Tanker
Tanker
Natural Gas Storage
LPG
Producers
Facilities
Transportation, Facilities & Marketing
End Users
Refinery
Retail
Distribution
Truck
Gathering Pipeline
Injection / Withdrawal Facilities
Gas Plants
Pipeline
Above Ground or
Underground
Storage
Common
Carrier
Pipelines
Common
Carrier and LDC
Pipelines
Chemical
Plants
Salt
Dome
Rail Car
Diluent for
Heavy Crude
Depleted
Reservoir
Underground Storage
LNG Tanker
Favorable Supply & Demand Trends Exist for Crude Oil,
Refined Products, LPG & Natural Gas on U.S./Regional Basis
U.S. Crude Oil Supply & Demand
U.S. Imports of Refined Products
(Millions of Barrels per Day)
(Millions of Barrels per Day)
18.0
4.0
Refinery Inputs: 15.2 MMbbls
16.0
14.0
Imports: 3.6 MMbbls
3.5
3.0
12.0
Supply Shortfall
10.1 MMbbls
10.0
8.0
2.5
2.0
1.5
4.0
Production: 5.1 MMbbls
1.0
0.5
0.0
0.0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2.0
LPG
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
6.0
U.S. Natural Gas Supply & Demand
(Billions of Cubic Feet per Day)




Alternating needs of refineries to
store/blend
Complex transportation logistics
Shortage of diluent for Canadian heavy oil
Inefficiency caused by multiple supply
sources and numerous regional supply
and demand imbalances
Source: Energy Information Administration
70.0
60.0
Consumption: 59.9 Bcf
Supply Shortfall: 9.2 Bcf
50.0
40.0
30.0
Production: 50.7 Bcf
20.0
10.0
0.0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Seasonal shifts in regional
demand:
…And Our Asset Base Is Well Positioned to Meet Dynamic Needs
of U.S. Energy Markets, Including Increases in Foreign Imports
PAA Business model underpinned by storage
assets at key market hubs

Crude oil








Refined products








Import data from Energy Information Administration: Crude Oil & Refined Products daily average
from past 52 weeks ending October 12, 2007. Natural Gas, 2005 annual.
Note: Some terminals capable of receiving both Crude Oil and Refined Products

Martinez (CA)
Richmond (CA)
Philadelphia (PA)/
Paulsboro (NJ)
LPG

= Key Market Hub
Cushing (OK)
St. James (LA)
Mobile (AL)
Kerrobert (SK)
Los Angeles (CA)
(incl. Pier 400)
Midland (TX)
Patoka (IL)
Bakersfield (CA)
Tirzah (SC)
Bumstead (AZ)
Alto (MI)
Schafferstown (PA)
Natural Gas / LNG


Bluewater (MI)
Pine Prairie (LA)
PAA Distribution Increased in 20 of Last 26 Qtrs
Historical Distribution Growth
Annualized Distribution Paid During Quarter
$3.50
$3.00
$2.50
$2.00
$1.50
1Q01 1Q02
1Q03 1Q04 1Q05 1Q06 1Q07
Target 7-9% average annual distribution growth for
the next several years (Primarily Underpinned by Base
Business & Organic Projects).
* Compound annual growth rate calculated beginning with 1Q01 distribution of $1.85 through November, 2007 distribution of $3.36.
Balance Sheet Strength & Liquidity
As of September 30, 2007 (Dollars in Millions)
Balance Sheet Summary
9/30/07
Total long-term debt
Partners' capital
Total book capitalization
12/31/06
2,624
3,423
2,626
2,977
$6,047
$5,603
3rd Quarter 2007 Credit Stats & Liquidity
LT Debt / Book Cap
43%
Adj. EBITDA / Interest
5.1x
LT Debt / Adj. EBITDA (1)
3.3x
Committed Liquidity
(1)
$1.5 B
Calculated using long-term debt as of September 30, 2007 and the mid-point of our 2007 adjusted EBITDA guidance range as
represented in our 8K dated 11/1/07.
Note: Adjusted EBITDA excludes selected items impacting comparability. Please see EBITDA reconciliations on our website at
www.paalp.com for further detail.
PAA’s Entry into the MLP Arena

1988 -1992 – Plains Resources (PLX), a publicly traded
E&P company, organized a new midstream effort as a
wholly owned sub (taxable corporation)



1993/1994 Identified the MLP vehicle as the most attractive
long-term structural platform;
By filing a consolidated return, PLX’s drilling activities & NOLs
sheltered taxable income of midstream activities.
1992-1998 – Built business around Cushing facility



Maintained separate corporate identity and credit facilities;
Excluded PAA’s assets from PLX revolver collateral;
Carved out ability to effect MLP from covenant structure of
publicly traded debt.
PAA’s Entry into the MLP Arena cont’d

1998 – IPO’d PAA, selling ~44% of LP units to public
(virtually all retail)


100% of GP retained by PLX
2001 – Restructured PLX and PAA:


Separated control and management of two entities; PLX
retained 44% of GP, 1 of 8 board seats; ~ 30% of LP units
Created stand-alone management for each entity (some
common equity holders)

2003 – PLX spun off E&P activities, retaining large
minority interest in PAA & minor E&P properties

2004 – PLX acquired by Paul Allen, renamed Vulcan
Energy Corporation (VEC)

2005 – Sale of ~19% ownership in GP by one owner
and exercise of ROFR increases VEC interest to 54%
PAA Ownership Structure Today
Vulcan
Capital
Affiliates
EnCap
54.3%(1)
11.1%
Mgt; Others
20.3%
PAA
General
Partner
~22% held by
GP Owners;
~78% Publicly
Held;
Kayne
Anderson
98%
2%
Plains
All American
Pipeline, L.P.
(NYSE: PAA)
(1) Subject to a voting agreement limiting Vulcan to 49.9% vote with respect to certain
corporate governance matters.
~15%
Factors PAA Considered in Selecting
The MLP Structure

PAA is primarily a “Business Builder” versus “Asset
Aggregator”


Principal growth drivers were synergies; revenue
enhancement; cost reduction; 2 + 1 = >3; etc.
Expansion of scale and scope creates additional expansion
opportunities

PAA business model & valuation approach is sound in a
corporate (fully taxable) structure, but excels in an MLP
(pass thru) structure

MLP Vehicle provides:




Lower cost of capital
Fairly stable access to capital (regardless of commodity prices)
Ability to realize larger portion of synergies
Disciplined, cash-based business model
PAA Total Distributions vs. Independent E&P
Dividends (3Q07 Annualized)
(in millions)
$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
L
G
)
(1
)
(1
(1) Calculated 3Q07 Dividends by multiplying shares outstanding at 9/30/07 by per share dividends
and adding 2Q preferred dividend payment.
NB
EO
C
AP
A
AP
N
A
DV
PA
Source: Bloomberg
What Is An MLP?

An MLP is a limited partnership whose shares (called units) are
traded on public exchanges

MLPs consist of:



The general partner




Manages the partnership
Typically owns 2% stake in the MLP & receives distributions
Eligible to receive incentive distributions if certain targets are met
(not in all, but in many structures)
The limited partners





General partner (GP)
Limited partners (LP)
Provide capital by buying units
Have no role in the operations and management and very limited
governance role
Receive cash distributions
Have less exposure to downside than the GP
(to the extent that the GP has incentive distributions)
The rights of the LPs are governed by a partnership
agreement (a contract versus corporate laws & standards)
What Is An MLP? (Continued)
Relationships in Typical Pipeline MLP (GP & E&P Entities Differ)

MLPs distribute all of their available cash to their partners every
quarter
Master Limited
Partnership
(MLP)
Capital
Management
& Capital
Tier 1 Cash Flow
98% to LPs
Limited
Partners
(LPs)
Tier 2 Cash Flow
85% to LPs
General
Partner
(GP)
Tier 3 Cash Flow
75% to LPs
Tier 4 Cash Flow
50% to LPs

Incentive distribution rights (IDRs) incentivize sponsor to grow
distributions and compensate for subordinated equity position
Examples of MLP Qualified Assets
Examples only, actual list is far more extensive
Crude Oil
Pipelines
Gathering Lines
Storage Terminals
Trucks & Trailers
Tankers
Refined Products
Pipelines
Storage Terminals
Trucks & Trailers
Tankers
Natural Gas
Pipelines
Gathering Lines
Centralized
Compression
Processing Plants
Storage Facilities
LNG Liquefaction
LNG Tankers
LNG Re-gasification
Other
E&P reserves
Coal reserves
Propane
Timber
History of the MLP Sector
First Generation MLPs -- A Bad Experience

Emerged in late 1970s and early 1980s
 Initially as asset securitization financing
 Several smaller partnerships rolled into an MLP

Numerous MLPs (E&P and refinery related businesses) imploded
in 1980s due to varying factors:
 Cyclical nature of the energy business
 Commodity price crash, inability to hedge
 Depleting assets
 Immature assets without stable cash flow
 Lack of management discipline

Tax Reform Act of 1986 narrowed the definition of qualified assets

Financial markets effectively established barriers to limit entry to
only mature, stable cash flow assets
Next Generation of MLPs
Early to Mid-1990’s

Used by large companies (primarily energy) to monetize stable,
undervalued cash flowing assets*
Feb 1990 – TEPPCO – Panhandle Eastern Pipeline (became Duke)
 Dec 1991 – Lakehead (now Enbridge) – Enbridge Inc.
 Jul 1992 – Enron Liquids (now Kinder Morgan) – Enron
 Sep 1993 – Northern Border – Enron, TransCanada (now Oneok)
 1994 – EOTT – Enron (acquired by PAA)
 Nov 1996 – Genesis – Salomon/Phibro (now Denbury)


While several entities were able to raise their distribution over time,
it was primarily through cost reductions and some organic growth

Prior to the purchase of Enron Liquids by Rich Kinder and Bill
Morgan in 1997, the term “Growth MLP” was considered an oxymoron
* Also used by a number of propane related entities to gain higher valuations
Tracking the Evolution of the MLP Market
Late 1990’s

Following the initial success of Kinder Morgan, new
MLPs were formed that emphasized growth


July 1998 – Enterprise Products
Nov 1998 – Plains All American

Pre-existing MLPs also started to embrace the
growth mantra and modified their management
styles

Equity market cap of entire MLP space ~ $10 billion
Tracking the Evolution of the MLP Market
Late 1990’s to 2005

From 1999 to 2000, MLP market depth was limited, due
primarily to “Hyper Returns” promised by technology
sector – “low double digit returns” were considered
boring

IPOs and follow-on offerings required quality assets,
growth and a business plan

Collapse of the Tech boom and a steady decline in
interest rates beginning in 2001 increased the
attractiveness of the MLP sector

New MLPs with assets that were previously not
considered appropriate for an MLP were brought to
market at attractive multiples
Increased Funds Flow to the MLP Sector
2003 to 2005

Closed-end MLP funds formed, providing investors
ability to invest in a portfolio of MLPs

Legislation passed permitting mutual funds to invest
up to 25% of their assets in MLPs

Traditional institutions migrated to the MLP sector,
either participating directly or through total return
swaps

Increased familiarity among high net worth and
traditional retail investors searching for higher-yielding
investment alternatives
Tracking the Evolution of the MLP Market
2005 – Present

Investor desire to own part of IDRs and sponsor desire
to monetize (partially or fully) investments led to IPOs
of GP entities

Universe of public GPs stands at 11: (IPO size)












Jan. 2004: Crosstex Energy Inc. ($52 MM)
Jun. 2005: Inergy Holdings, LP ($88 MM)
Aug. 2005: Enterprise GP Holdings LP ($353 MM)
Feb. 2006: Energy Transfer Equity, LP ($507 MM)
Feb. 2006: Magellan Midstream Holdings, LP ($539 MM)
May 2006: Alliance Holdings GP, LP ($313 MM)
Jul. 2006: Valero GP Holdings, LLC ($380 MM)
Jul. 2006: Atlas Pipeline Holdings, LP ($83 MM)
Aug. 2006: Buckeye GP Holdings, LP ($179 MM)
Sep. 2006: Hiland Holdings GP, LP ($149 MM)
Dec. 2006: Penn Virginia GP Holdings, LP ($117 MM)
Equity market capitalization of 11 GPs is ~$22.2 billion,
with public float of ~$7.9 billion
Tracking the Evolution of the MLP Market

Over the last 8 years, the MLP market has changed
significantly:








Significant increase in number of MLPs
Diversification in types of qualifying assets and their location
Reduction in minimum size for MLP IPOs
Growth in aggregate market capitalization
Advent of closed-end MLP funds
Passage of mutual fund legislation
Public offerings of general partner entities
Low interest rate environment and positive funds flow
into the sector have


Driven yields to relatively low historical levels
Reduced the range of relative yield spreads among the MLPs
Suburban
Heritage
Crown
Star
Cornerstone
U.S. Timber
Plains
Alliance
Atlas
97
98
99
00
Genesis
Amerigas
Arcadian
Lakehead
(Enbridge)
Pride
Kaneb
Santa Fe
Huntway
Plum Creek
Teppco
AMC
91
TC Pipe
Ferrellgas
No Border
96
90
Enterprise
Leviathan
(El Paso)
Enron Liquids
95
89
(Kinder Morgan)
94
88
National
EOTT
El Paso Ref.
93
Borden
Years
Includes all MLP IPOs and is based on closing date of IPO
(1)
92
87
Average of 2 IPOs per
Year
Pipeline / Terminals / GPM
Propane
Coal
Other
(1)
Source: Vinson & Elkins; SEC
MLP Initial Public Offerings 1987 – 2000
MLP Initial Public Offerings 2001 – 2007
Source: Vinson & Elkins; SEC; PAA
Universal
Williams
Calumet
Eagle Rock Compression
Valero
GP
Enterprise
GP
Crosstex
Vanguard
Cheniere
Encore
Targa
Spectra
Legacy
Reserves
Penn Virginia
Constellation
GP
Duncan
Energy
Quicksilver SemGroup
Capital
Product
Atlas
Energy
Boardwalk
Energy
Linn Energy
Transfer GP
Hiland GP Buckeye GP Atlas GP
Regency
DCP
Midstream
Hiland
K-Sea
MarkWest
Penn Va
Sunoco
Holly
Energy
Pacific
Inergy
StoneMor
Natural
Resource
Shamrock
Copano
Transmont. Inergy GP Teekay LNG
Magellan
GP
EV Energy
Teekay
Offshore
Breitburn
Alliance
GP
Global
U.S.
Shipping
Martin
Williams
Years
07
06
05
04
02
03
01
None
Average of ~7
IPOs/year-- 28 in
last 21 months!
Pipeline / Terminals / GPM
Propane
Coal
E&P
Other
Historical Performance of MLPs*
Source: Alerian Capital Management
50%
45.7% 43.7%
44.5%
40%
30%
20%
Historical CAGR
1-Year = 23.7%
3-Year = 19.0%
5-Year = 22.3%
10-Year = 16.9%
26.2%
26.1%
16.7%
16.6%
15.9%
6.3%
10%
0%
-10%
-3.0%
-3.4%
-7.8%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
* Total annual returns as measured by the Alerian MLP Index. 2007 data through 10/26/07. Historical
CAGR through October 2007.
Why Do Investors Like MLPs?

Compelling total return proposition with low relative risk
 Attractive current yields of 5% - 7%
 Distribution growth of 5% - 7% per year
 Total return potential of 10% - 14%

Fundamentals are positive as growth in U.S. energy
infrastructure is required
 Rising demand for petroleum products
 New sources of supply (conventional, foreign imports,
LNG, etc.)

Demand for yield securities growing as aging U.S.
population seeks income for retirement

Relatively early stages of MLP asset class development
 Potential to follow development of REIT market
 Growing institutional interest in sector
Selected Observations/Lessons Learned

Valuations do not always move up and to the right

Capital markets do not always reflect fundamentals

At any given time, relative market valuations are more reflective
of aggregate capital flow issues, headline issues and momentum
issues of individual MLPs than relative risk and fundamental
outlook – learn to deal with it

Imitation may be the best form of flattery, but generally results in
lower entry barriers and more competition

Develop a long-term business model that anticipates hiccups in
your business and the capital markets -- the exact scenario may
not develop, but the practice will serve you well to address actual
developments
NYSE: PAA
Except for the historical information contained herein, the
matters discussed in this presentation are forward-looking
statements that include risks and uncertainties. These risks and
uncertainties include, among other things, market conditions,
governmental regulations and other factors discussed in Plains
All American Pipeline, L.P.’s filings with the Securities and
Exchange Commission.
Non-GAAP Reconciliations
2000 - 2007 EBITDA Reconciliations
(Dollars in Millions)
Reported Net Income
Interest Expense
Depreciation & Amort.
Other
Reported EBITDA
SFAS 133
Other
Selected Items
Impacting Comp.
2001
2002
2003
$77.5
28.7
24.5
$44.2
29.1
23.3
$65.3
29.1
34.1
$59.4 $130.0 $217.8 $285.1
35.2
46.7
59.4
85.6
46.2
68.7
83.2 100.4
0.9
$380.7
162.1
177.9
16.1
$96.6 $128.5
$140.8 $245.4 $360.4 $472.0
$736.7
$130.7
2004
2005
0.0
(27.7)
(0.2)
13.2
(0.3)
2.2
(0.4)
28.8
(1.0)
8.0
18.9
28.2
4.4
36.4
14.8
35.3
(27.7)
13.0
1.9
28.4
7.0
47.1
40.8
50.1
$169.2 $252.4 $407.5 $512.8
$787.0
$441.6
Adjusted EBITDA
$103.0 $109.6 $130.4
Adjusted Net Income (2)
Note: Amounts may not recalculate due to rounding.
(1)
(2)
(1)
2006 2007 (G)
2000
Midpoint of Guidance as found in Form 8-K furnished November 1, 2007.
Includes additional $10.8 mm deferred income tax expense, a Selected Item Impacting
Comparability which impacts net income but not EBITDA.