Plains All American Pipeline L.P. (PAA) reported adjusted earnings of 59 cents per share, marginally above the Zacks Consensus Estimate of 58 cents and down from 71 cents reported a year ago. 

Plains All American reported a 13% increase in the adjusted earnings for the Transportation segment due to higher average pipeline tariffs and increased pipeline loss allowance revenue. The Facilities segment income increased 48% driven by capacity increases from recently completed capital projects, recent acquisitions and higher average lease rates at various facilities. However, the income for the Marketing segment decreased 25% due to declines in margins partially offset by a favorable contango market and lower operating costs. 

Revenue in the quarter dropped 45% to $4.86 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 5% to $234 million from $223 million reported last year. 

Plains All American has been very active during the quarter, delivering solid operating and financial results. During the quarter, it acquired the remaining 50% interest in the Natural Gas Storage business, raised approximately $1.2 billion in the capital markets at very attractive rates, and increased the annualized distribution by 6 cents to $3.68 per unit. 

At quarter-end, the company’s balance sheet was strong, with over $1.6 billion of available liquidity, of which $260 million was used to prepay 7.125% notes. 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 47%. Maintenance capital expenditures in the quarter were $12 million. 

For the fourth quarter, the company guided adjusted EBITDA in the range of $240−$265 million and adjusted net income of $114−$143 million or 56−76 cents per unit. For the full year 2009, it expects adjusted EBITDA in the range of $985 million to just over $1 billion and adjusted net income of $520−$549 million or $2.88−$3.10 per unit. 

Plains All American expects maintenance capital expenditures for the full year of 2009 to range from $85 million to $95 million. Based on the recent distribution announcement, the company expects the distribution per unit for 2009 to be slightly over $3.62 per common unit, an approximate 4% increase over the average distribution paid in 2008 of $3.50 per unit.
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