Greetings and welcome to Plains All American Pipeline's First Quarter 2009 Results Conference Call. During today's call, participants will provide forward-looking comments on the Partnership's outlook as well as review the results of the prior period. Accordingly, in doing so, they will use words such as believe, estimate, expect, anticipate, et cetera. The Partnership intends to avail itself of Safe Harbor provisions that encourage companies to provide this information and directs you to the risks and warnings set forth in Plains All American Pipeline's most recently filed 10-K, 10-Q, 8-K and other current and future filings with the Securities and Exchange Commission. In addition, the Partnership encourages you to visit its website at www.paalp.com, in particular, the section entitled Non-GAAP Reconciliation, which presents certain commonly used non-GAAP financial measures such as EBITDA, EBIT, which maybe used here today in the prepared remarks or in the Q&A session. This section also presents a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures and includes a table of selected items that impacts comparability with respect to the Partnership's reported financial information. Any reference during today's call to adjusted EBITDA, adjusted net income and the like is a reference to the financial measure, excluding the effect of the selected items impacting comparability. Today's conference call 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. I'll now turn the call over to Mr. Greg Armstrong.

Thank you, operator. Good morning and welcome to everyone. I would also point out that Pat Diamond, our Vice President responsible for Strategic Planning and Roy Lamoreaux, PAA's Manager of Investor Relations as well as several other members of our management team are presently available for the question-and-answer session that will follow at the end of our prepared remarks. As a reminder, the slide presentation we will be referring to in this call is available on our website at www.paalp.com. Yesterday afternoon, Plains All American reported first quarter operating financial results that exceeded the high end of our guidance range. These results were generated by solid contributions from our fee and fee equivalent activities in all three of our business segments. Additionally, our Marketing segment capitalized on the contango market conditions and favorable volatility experienced during the first quarter of 2009. These results once again highlight our ability to generate low-risk, baseline plus results during favorable market conditions. In addition to discussing the details of our first quarter results, during the course of today's call, we will be covering information that supports the two major takeaway points listed on slide three. That is: first, PAA's asset base and business model are well situated to generate solid results in the current market environment and are performing as designed; second, we have significant unused committed liquidity and we are well positioned to continue to execute our business plan and pursue attractive acquisition and expansion opportunities in the current market environment even if it extends through 2010. Let me begin by briefly discussing the results we released yesterday afternoon. As illustrated on slide four, for the first quarter of 2009, we reported EBITDA of $321 million and net income of $211 million, or $1.41 per diluted unit. Excluding the selected items impacting comparability,…

Thanks Greg. During my portion of the call, I'll review our first quarter operating results compared to the midpoint of our guidance issued on February 11, 2009 and discuss the operational assumptions used to generate our second quarter 2009 guidance and discuss the progress of our expansion capital program. Let me begin with our operating results for the first quarter. As shown on slide seven, adjusted segment profit for the Transportation segment was $117 million or $0.45 per barrel, which exceeded the high end of the guidance range. Total volumes of approximately 2.9 million barrels per day were just slightly below our guidance. Crude oil pipeline volumes were off by about 29,000 barrels per day, and that was primarily due to the fact that our new pipeline system into Salt Lake City came in a little later than forecasted. Volumes in our refined products pipelines were off by about 20,000 barrels per day, and that was primarily due to an extended refinery turnaround in the Rocky Mountain region. But lower tariff revenues in the quarter were more than offset by lower than forecasted operating expenses as utility costs and costs related to some of our integrity projects came in lower than anticipated. Adjusted segment profit for the Facilities segment was $47 million, or $0.27 per barrel, which was just above the high end of our guidance range. Average capacity was 58 million barrels per month, which was in line with the guidance of 59 barrels per month. The slight variance in volumes was due to lower volumes in service in our California facilities. Most of the over performance for the quarter was due to lower operating expenses, again, primarily related to utility and integrity costs. Adjusted segment profit for the Marketing segment was $107 million, or $1.36 per barrel, compared…

Thanks Harry. During my portion of the call, I will address our capitalization, liquidity and 2009 guidance. As summarized on slide 11, we ended the first quarter of 2009 with a solid capitalization and liquidity position, which was well in line with our targeted credit metrics. At March 31, 2009, our long-term debt to total capitalization ratio was 47%, our adjusted EBITDA to interest coverage multiple was 5.3 times. And based on our midpoint of our 2009 adjusted EBITDA guidance, our long-term debt to adjusted EBITDA ratio was 3.3 times. Our short-term debt at the end of the first quarter was approximately $600 million, which represents a reduction of approximately $400 million from December 31, 2008. This short-term debt is primarily associated with hedged inventory and will be repaid with the cash proceeds received when the inventory is liquidated. Including short-term debt, our total debt to capitalization ratio was 51%, which is well within our target guideline of 60% or better. In mid-March, we completed an overnight marketed equity offering which, including the underwriters' over-allotment option and the 2% GP contribution, resulted in the sale of 5.75 million limited partner units at $36.90 per unit, resulting in net proceeds of $210 million. The offering was priced at an all-in discount of 5.3% to our closing price the day of launch and the vast majority of this offering was sold to the retail market. At March 31, we had 1.5 billion of available committed liquidity, including 1.3 billion of availability under our 1.6 billion revolving credit facility and approximately 170 million of availability under our 525 million hedged inventory facility. This compares to 1 billion of available committed liquidity at year-end 2008 and reflects the seasonal reduction in LPG inventory borrowings, rotation from higher cost inventory to lower cost inventory, our…

Thanks Al. We're pleased with PAA's first quarter performance. We certainly have a positive outlook for the remainder of 2009 and we like our overall financial positioning. In our February conference call, we shared our view that global economic and financial market conditions were likely to linger into early to mid 2010, but not throughout 2010. Although certain parts of the financial markets appear to have somewhat stabilized recently, as I noted at beginning of this call, we remain cautious about the challenges being encountered by the global economic and financial markets. Accordingly, we have taken and will continue to take deliberate actions to position the Partnerships for a potential protracted period of economic weakness. Importantly, these actions position PAA to play offense, defense or a combination of the two. We have further strengthened what we believe to be one of the strongest balance sheets and liquidity positions in the MLP sector. As the projection that Al shared with you illustrates, PAA's liquidity position is not committed to fund large capital projects that are already in progress, but is available for unforeseen developments and attractive expansion opportunities that are not included in our current growth outlook. We believe that PAA possesses the financial firepower to opportunistically consummate a sizeable acquisition or expansion capital project at an attractive rate of return without straining its balance sheet or worrying about financing contingencies. While our liquidity position should enable us to move decisively to pursue attractive acquisitions in almost any environment, we will continue our disciplined approach to financing our growth with at least a 50% balance of equity and excess cash flow and maintaining the high level of liquidity. In summary, we have excellent capitalization and liquidity and our assets and business model are performing as designed. We are cautiously optimistic about the future and believe that PAA continues to represent an attractive investment opportunity that combines a substantial current yield with a solid foundation for continued growth. Prior to opening the call up for questions, I would also mention that on the afternoon of Thursday, June 10th, we plan to host an Analyst Meeting in New York City. If you wish to attend and have not yet responded, please advise our Investor Relations team at 713-646-4222. The meeting will also be webcast live with participation instructions provided at a later date. This concludes our prepared remarks for this morning. We thank you for your joining us today and we appreciate your continued support and we look forward to updating you on our next call. Operator, at this time, we can open the call up for questions.

Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions). Our first question comes from the line of Gabe Moreen with Bank of America - Merrill Lynch. Your line is now open. You may proceed.

Hey good morning guys. Question on potential distribution increases for the remainder of the year. I guess Greg in your mind, is any one metric out there that you're overweighting relative to others that I guess we should be focused on, whether it's fixed income, market improvements, MLP equity valuation improvements, or just broader economic backdrop? Just trying to gauge what you are thinking there.

Gabe, good question. We aren't going to provide guidance. I can say that we are pretty... we have had 29 straight quarters which goes over seven years of delivering on our guidance. And we need to be able to do that, to continue to do that to obviously drive future growth. I don't want to sound like a Cassandra with respect to the future, but we are probably not as convinced at this point in time that the fundamentals of the economy have actually... are supporting the enthusiasm we are seeing in the financial markets. And so we are a bit cautious. I would say that what we're looking for is confirmation that the fundamental economic groundwork has stabilized and we just... we haven't seen that yet. So we'll continue to be cautious. I think when we... as we did already, by increasing the distribution at this point, we recognized that our positioning is very strong and that the markets that really paralyzed, if you will, back in September of 2008 through really November to early December of 2008... that part of it has seemed to have melted a little bit and that is encouraging. Bottom line is it says quality companies can access the market. Maybe the costs are higher than they used to be, but they have access to capital. There was a period of time in there where there was not certainty that anyone would have access. I would say that we are just going to continue to monitor the market. We've got to deliver on our performance, but I think we'll continue to monitor it. If the current environment, the feel of the environment in the financial markets were to continue, I would say that would be a positive sign for future distribution growth. If it got much weaker, I think it is a positive sign for PAA to be able to use that liquidity to take advantage of opportunities.

Thank you. Our next question comes from the line of Xin Liu with JPMorgan Chase & Company. Your line is now open.

Good morning, guys.

Good morning.

In terms of your... you apparently had a very low operating cost in your transportation segment. You mentioned it's due to lower fuel costs and the integrity expense. How much is it due to the lower fuel costs versus the other? And do you expect the cost... this kind of cost level to continue in the rest of the year?

I think it's close to 50:50 between the integrity costs and the utility costs. Right now, I think we don't expect to see a huge, significant increase in the utility costs and that's been factored into our guidance for the rest of the year.

I would say the issue that always plagues anybody trying to do forecasts is we have seen certainly natural gas prices, diesel prices, crude oil prices come down. It is how fast do those decreased commodity prices that we see on the Bloomberg screens, et cetera, transfer to the field. What we have seen it has been a little more rapid than what we forecast. And so probably our projected cost across the board on expenses at the beginning of year was probably a little bit higher than we are currently experiencing. And depending on your commodity price outlook, if it stays in this environment, we should be able to have some net savings as we go forward.

Thank you. Our next question comes from the line of Brian Zarahn from Barclays Capital.

Good morning.

Good morning, Brian.

On marketing, obviously contango had a favorable impact. Can you talk about how contango is impacting your gathering business?

Over the last few years we have shifted the way we price a lot of our lease gathering business. At one time probably 25% to 30% of our lease gathering business was negatively impacted by a contango market. That's probably less than 10% today. So it does have an impact. It was reflected in the first quarter results, but not nearly the magnitude as it would have had in prior years.

Thank you. Our next question comes from line of Darren Horowitz with Raymond James and Associates. Your line is now open.

Hey, good morning, guys, congratulations on the quarter.

Thanks Darren.

Greg, from a transportation perspective, as I'm trying to get a sense of price-induced producer containments... what are you seeing around the Basin line and also on the west Texas and New Mexico systems? And is there any one area that gives you more concern than another if prices weaken into the middle of this year?

Darren, so far we're not seeing a lot of lower volumes coming out of west Texas overall. It kind of ebbs and flows. Clearly when there's reason for people to store in west Texas because of the contango and it really depends not only on the market but also the sweep of the spreads between... the basis differentials. But we had pretty high volumes in the first quarter on Basin.

And the Basin was... first quarter was influenced by a refinery in East Texas area that was out of service because of a fire late last year. So that refinery is back online. That will move off of Basin onto the west Texas Gulf system. So we have got forecasts at a little lower volumes second half of year than we did first quarter on Basin. And that's the primary driver. Buys have been good in West Texas. We are seeing drilling slowing down, so our forecast does have a little bit lower volumes as we move forward.

Darren, if you look at our 8-K, I think we have got average basin volume forecast at 370,000 barrels per day in the second quarter and we basically guided that down to 360,000 barrels a day in the second half. So we are anticipating ultimately that the slowdown in drilling will have an effect. So far as Harry said, for other reasons you can't really see it in the first quarter because of refinery upsells.

Thank you. Our next question comes from the line of Gil Alexander (ph) with Darphil Associates. Your line is now open. You may proceed.

Good morning, congratulations. I was wondering, could you share with us Rainbow profits in the first quarter?

Not... we don't give P&Ls on each of our pipelines. I can tell you that it is basically performing pretty much in line with our acquisition forecast and we are pretty pleased overall with everything. As you can tell, our guidance has been creeping up overall, and certainly that's been a component of that in terms of just the acquisition added to our base level of earnings and it's performing in line with the acquisition of it.

Thank you. Our next question comes from the line of John Edwards with Morgan Keegan. Your line is now open. John Edwards - Morgan Keegan & Co., Inc.: Good morning, everybody.

Good morning, John. John Edwards - Morgan Keegan & Co., Inc.: Greg, you were mentioning... talking a little bit about Pier 400. I think that you were saying that you are about ready to get the... the permit period is about ready to allow you to proceed. And I was just wondering if you could give an expectation of when you think that that would come to fruition... assuming that you do get your permit on schedule.

John, we are being a little bit cautious in trying to predict that. I think that Harry indicated in his comments that we are looking at potentially being in a position to actually start construction, if everything was to fall in place within the next 12 to 18 months, which is probably as short a period as you've ever heard us talk about being able to actually take action in creating that asset. I think one of the issues has been as costs have risen quite a bit since the permitting process started, and clearly the economic environment for our customers is a little bit different now than when they... it was two years ago, is we are having discussions, as Harry mentioned, on how we can actually reduce the costs to make them have a project that works for their functional and operational needs and we have a project that works from our expected returns. So I would say we're very close in terms of coming over the hurdles that were hard to project before, which is regulatory, environmental. As Harry mentioned we have... the last appeal to protesting the EIR was --

Was denied.

Denied just recently. So we would hope to get that aspect cleared up by the end of May. But we still have opened the lease with the Port of LA, which is an economic issue, and then also the size and the rate of return that we need to make on our capital with our customers. And so we are allowing for that to take a little bit longer than perhaps optimism would say. And so that's why we put the 12 to 18 months out there.

And what we have done is we have accelerated engineering on some of the longer lead time items, so that as we... as we put the rest of these outstanding items to bed, we can hit the ground running and not lose time.

Thank you. We do have a follow-up question coming from the line of Gabe Moreen from Banc of America. Your line is now open.

Good morning. Wondering if I could ask some questions on gas storage, specifically around expanding Pine Prairie further. I think that you had talked in the past about Caverns#4 and 5, so wondering what status is of those. And second question is given the widening of current storage summer-winter spread here, wondering if your marketing arm controls any capacity either at the new Pine Prairie caverns or at Bluewater?

To answer your last question first, at this point in time our marketing arm does not have any real storage at Pine Prairie. We have basically leased that out to third parties. Where we are in the expansion process... we have got two of the three caverns are in service now, a third cavern, which is scheduled to come online in the second quarter of 2010, and it's on schedule today operationally. We also filed on February 6th a permit to expand Pine Prairie from an aggregate 24 BCF to an aggregate 48 BCF, which will include adding, as you mentioned, two new caverns, what we'd refer to as 4 and 5. Each of those would be 10 BCF and then the incremental 4 BCF that is in the expansion permit would come from expanding caverns 2 and 3 from 8 BCF to 10 BCF. The normal process for expecting a response from both FERC and the Louisiana Department of Natural Resources would probably put us into the third to fourth quarter of this year. And we are hopeful that if we can get the permit at that time... we'll be taking all the steps necessary operationally to move with speed once... and if we get those permits, so that we could take advantage of what's clearly a much more favorable cost environment today than what we faced in 2005 and 2006. And clearly we also have the experience of knowing the peculiarities and the attributes of our particular drilling environment, and we also have the leaching facilities in place. So at that point in time, we believe that we can stamp out caverns pretty much with good definition on the time period to start and deliver that. We think that's a competitive advantage. We have our leaching system... I think, if you looked across the number of facilities out there, we are probably 1.5 to perhaps two times the leaching capacity. At ours, we can move about 8000 gallons a minute. That's over 240,000 barrels per day. And so that gives us the ability to handle new cavern development as well as dewatering any existing caverns as they are brought into service.

Thanks Greg.

Thank you.

Thank you. [Operator instructions]. We have a follow-up question coming from the line of Brian Zarahn with Barclays Capital. Your line is now open.

Greg, can you give your perspective on what's been taking place so far this year in the May M&A activity that we are seeing and consolidation efforts? What do you expect to happen this year?

From an asset transaction standpoint, there's still a fair spread between the bid and ask between buyers and sellers. I think that you might have heard that on some other calls as well. I think that sellers are less proud of the assets they have to sell in recognizing that multiples that might have been available 18 months ago are no longer available. That said, I don't think that the gap has completely closed. You're just not seeing a lot of transactions announced. And we do think there are a lot of opportunities out there, which is part of the reason that we really went to develop our war chest and develop, if I can borrow a term from JPMorgan, a fortress balance sheet. As far as the MLP space goes, I think a couple of years ago we approached 75 MLPs. If you actually look at the list of MLPs... and Pat's here with me... I think you can see clearly that there's probably going to be a shrink of probably around 10 MLPs just because of the LPs acquiring the DP, or in some cases the LP and the GP being taken private. And so I think consolidation, the first wave of it has started, and that is to take out entities that either aren't necessary in this environment, whether it is a GP where they can't really help the growth, but they do hurt the cost of capital. And so those are happening now, but I think the true consolidation of MLP to MLP where there's institutional... or an industrial synergies will occur. They are very complex, but they are getting easier because the legal profession, the investment bankers and even directors are getting more comfortable. So personally I think you'll probably see five or six MLP mergers over the next 18 to 24 months. They take a while to do though. They are not going to happen in a hurry.

Thank you. Our next question comes from the line of Gil Alexander with Darphil Associates. Your line is now open.

Hi, good morning again. With the higher cost of capital, could you give us any guidance as to what return of capital targets you want for new projects and acquisitions?

Gil, it's an excellent question. And the... the answer is much higher than what we were looking for before. I think we believe it should be in the 300 to 500 basis points above the cost of capital. What determines where you are in that range is a number of items ranging from risk, if you are looking at very low risk, moderate growth, you could be in the lower end of that spread. If it's higher risk but higher potential, it could be in the higher end. And then there is obviously hybrids in between. But I would say we're pretty proud of our capital right now, both because it is more expensive, as you suggest, and we don't think that it is freely available to everyone as it used to be, even if you are going to pay the higher cost. And we think that we as management should be challenged to capitalize on that advantage, if you will, of having access to reasonable cost capital, higher than what it used to be... but still a reasonable cost and having a depth of market that allows us to do large deals or multiple moderate sized deals.

Thank you.

Thank you, Gil.

Thank you. Our next question comes from the line of Barrett Blaschke with RBC Capital Markets. Your line is now open.

Yes, I was wondering if you have a target level that you are shooting for how much of storage would be reserved for client and how much would be third party over the long term?

Again, it depends a little bit on the reason. If it... we are building storage right now for example in Cushing. A portion of that is already committed to refiners that are going to use it regardless of market environment, and we really like that type of customer because they provide a level of liquidity and activity in any environment. And, again, we're a MLP, and while it's fun to make contango profits while they are there. It is a lot more fun to have a stable source of income throughout any environment. And we are not smart enough to figure out if the future is going to stay in contango or backwardation. My guess is it'll be a combination of the two. We do retain a certain amount of tankage always for... to help protect our lease business and optimize that value. And we are able to not only do that in the short term, but over the time in the future, we can actually enter into synthetic leases, which you see in our disclosure where we talked about how we can create value there. So right now, I think we have close to 11 million total, including --

11 million to 12 million barrels reserved for --

And that's out of 85 million system wide. And of that 11 million barrels, Barrett, several million barrels of that are associated with our foreign crude, which is really a fee-based business, but we handle it in our marketing activities because of way we do the buys and sells, and then a portion of that is basically for arbitrage opportunities where again we are able to synthetically underpin that with financial derivatives. And then a portion of it's available for the contango market opportunities.

Okay. Thank you.

Thank you.

Thank you. We do have another follow-up question from the line of Xin Liu with JPMorgan & Chase. Your line is now open.

Looking at your guidance for facilities, the second half, the per barrel margin ticked up. Is that mainly because of the gas storage that you put into service?

It's a combination of the gas storage, new tanks coming on at higher rates and just a little lower integrity costs forecasted in second half of year. A lot of the API 653 costs were scheduled to be incurred in the first half of the year.

Okay. Thank you.

Thank you. At this time, there are no further questions. I would like to now turn the floor back over to management for closing comments.

Thank you. Thanks to everybody for participating in today's call and also for your continued attention and support, and we look forward to updating you on our progress and plans in the second quarter call.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you very much for your participation. Have a wonderful afternoon.