Plains All American Pipeline L.P. (PAA) reported adjusted earnings of 80 cents per unit, above the Zacks Consensus Estimate of 70 cents and last year’s earnings of 74 cents.

For the full year 2009, the partnership reported earnings of $3.14 per unit, beating the Zacks Consensus Estimate of $2.76 and the year-ago earnings of $2.93. The partnership’s 2009 earnings also exceeded its full-year 2009 earnings guidance of $2.88-$3.10 per unit.

Plains All American reported a 1% and 10% increase in the adjusted earnings for the Transportation segment for the fourth quarter and full year of 2009, respectively, due to higher average pipeline tariffs and increased pipeline loss allowance revenue.

The Facilities segment income increased 22% and 39%, respectively, driven by capacity increases from recently completed capital projects and acquisitions. The income for the Supply & Logistics segment increased 45% and 12%, respectively, due to higher average LPG margins and favorable Contango market conditions experienced early in the year.

Revenue in the quarter increased 23% to $6.08 billion, while revenue for the full year dropped 62% to $18.5 billion. In the fourth quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 17% to $275 million from $236 million reported last year. For the full year, adjusted EBITDA totaled $1.02 billion, up 15% from $887 million in 2008.

At year-end, the partnership’s balance sheet was strong, with over $975 million of available liquidity. It had approximately 136.1 million units outstanding, long-term debt of $4.1 billion and an adjusted long-term debt-to-total capitalization ratio of 49%. Maintenance capital expenditures were $25 million for the quarter and $81 million for the year.

The partnership declared a quarterly distribution of 92.75 cents per unit (371 cents per unit on an annualized basis) payable February 12, 2010. This distribution represents an increase of approximately 3.9% over the quarterly distribution paid in February 2009 and an increase of approximately 0.8% from the November 2009 distribution level.

Outlook

Looking into 2010, the partnership is well positioned to continue to grow its business platforms and distributable cash flow through a combination of organic growth capital projects and acquisitions. For the full year 2010, the partnership expects adjusted EBITDA to range from $1.015 billion to $1.065 billion with adjusted net income ranging from $505 million to $571 million or $2.49 to $2.96 per diluted unit.

The partnership forecasts first quarter adjusted EBITDA to range from $250 million to $270 million with adjusted net income in the $122 – $147 million range or 60 – 78 cents per diluted unit.

For the Transportation segment, volumes are projected to be approximately 2.9 billion barrels per day which is inline with 2009 volumes, with segment profit per barrel expected to be 49 cents per barrel, inline with 2009 results.

Facility segment guidance is based on total capacity of 68 million barrels of oil equivalent, with segment profit per barrel forecasted to be 33 cents per barrel, up 10% from 2009 levels. Supply & Logistics segment volumes guidance is 825,000 barrels per day with a projected midpoint segment profit of 83 cents per barrel.

Plains All American expects maintenance capital expenditures for 2010 of approximately $85 million.

Read the full analyst report on “PAA”
Zacks Investment Research