TABLE OF CONTENTS

Item 9.01. Financial Statements and Exhibits
Item 2.02 and Item 7.01. Results of Operations and Financial Condition; Regulation FD Disclosure
SIGNATURES
Exhibit Index
Press Release

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Table of Contents

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*		The projected average foreign exchange rate is $1.15 CAD to $1 USD. The rate as of November 1, 2006 was 1.13 CAD to $1 USD.
**		See Note 9. The application of EITF 03-06 may result in interim period amounts not totaling to the annual amount.

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1		Per Pacific Energy mid-point estimate of $36.9 million reported in its press release dated November 1, 2006 and prorated based on an assumed closing date of November 15, 2006. Excludes the impact of anticipated transaction synergies and contributions from capital expansion projects under construction.
2		As computed by PAA based on debt assumed from Pacific Energy and estimated cash paid on an assumed closing date of November 15, 2006. Such interest expense includes a forecast of interest incurred on the New Senior Notes from November 15, 2006 through the remainder of the year, but does not include interest expense on the New Senior Notes or interest income from investment of the proceeds for the period prior to November 15, 2006.
3		PAA estimate of depreciation and amortization on the acquired assets based on the straight-line method of depreciation over average useful lives ranging from 5 to 40 years. Depreciation and amortization estimates are based on estimated purchase price allocations assumptions used in PAA's Current Report on Form 8-K filed on August 24, 2006.

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		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2006				2005				2006				2005
		(in millions, except per unit data)
Long-Term Incentive Plan (“LTIP”) charge		$	(10.3	)		$	(6.7	)		$	(27.1	)		$	(16.9	)
Cumulative effect of change in accounting principle – LTIP(1)			-				-				6.3				-
Gain/(loss) on foreign currency revaluation			-				(1.6	)			-				(1.4	)
SFAS 133 mark-to-market adjustment			17.9				6.3				14.8				(20.0	)
Total		$	7.6			$	(2.0	)		$	(6.0	)		$	(38.3	)
Per Basic Limited Partner Unit(2)		$	(0.06	)		$	(0.16	)		$	(0.39	)		$	(0.67	)
Per Diluted Limited Partner Unit(2)		$	(0.06	)		$	(0.16	)		$	(0.38	)		$	(0.66	)

(1)		During the first quarter of 2006, we adopted SFAS No. 123(R)(revised) “Share Based Payment,” which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements at fair value. The cumulative effect adjustment represents a decrease to our LTIP life-to-date accrued expense and related liability, and therefore resulted in a non-cash gain of $6.3 million in the first quarter of 2006.
(2)		In periods when the Partnership’s net income exceeds the cash distribution paid during such periods the application of Emerging Issues Task Force Issue No. 03-06: “Participating Securities and the Two-Class Method under FASB Statement No. 128” (“EITF 03-06”) does not impact the Partnership’s aggregate net income or EBITDA, but does reduce the Partnership’s net income per limited partner unit. The application of EITF 03-06 negatively impacted basic and diluted earnings per limited partner unit by $0.16 for the third quarter of 2006, $0.13 for the third quarter of 2005, $0.31 for the first nine months of 2006 and $0.12 for the first nine months of 2005. This impact is included as a selected item impacting income per limited partner unit.

		Three Months Ended								Three Months Ended
		September 30, 2006								September 30, 2005
						Gathering,								Gathering,
						Marketing,								Marketing,
						Terminalling &								Terminalling &
		Pipeline				Storage				Pipeline				Storage
		Operations				Operations				Operations				Operations(4)
		(in millions)								(in millions)
Revenues(1)		$	281.5			$	4,284.8			$	303.3			$	8,395.8
Purchases and related costs			(167.8	)			(4,136.7	)			(206.7	)			(8,292.7	)
Field operating costs (excluding LTIP charge)			(47.2	)			(43.4	)			(37.0	)			(30.4	)
LTIP charge – operations			(0.4	)			(0.6	)			(0.3	)			(0.6	)
Segment G&A expenses (excluding LTIP charge)(2)			(9.8	)			(13.9	)			(10.2	)			(10.5	)
LTIP charge – general and administrative			(4.1	)			(5.2	)			(3.4	)			(2.4	)
Segment profit		$	52.2			$	85.0			$	45.7			$	59.2
SFAS 133 mark-to-market impact(3)		$	-			$	17.9			$	-			$	6.3
Maintenance capital		$	5.3			$	2.9			$	2.9			$	1.3

(1)		Includes inter-segment amounts. We have adopted EITF 04-13, which impacts the comparability of our revenues, effective April 1, 2006. Revenues for the three months ended September 30, 2005 include buy/sell transactions of $52.2 million and $4,442.8 million in the Pipeline segment and Gathering, Marketing, Terminalling & Storage segment, respectively.
(2)		Segment general and administrative expenses (G&A) reflect direct costs attributable to each segment and an allocation of other expenses to the segments based on the business activities that existed at that time. The proportional allocations by segment require judgment by management and will continue to be based on the business activities that exist during each period.
(3)		Amounts related to SFAS 133 are included in revenues and impact segment profit. The SFAS 133 mark-to-market adjustment is primarily based upon crude oil prices (and to a lesser extent, other product prices) at the end of the period and is related to the non-effective portion of our cash flow hedges, as well as certain derivative contracts that do not qualify under SFAS 133 as cash flow hedges. The net gain or loss related to these derivative instruments is substantially offset by physical positions in future periods.
(4)		Gains/losses on foreign currency revaluation are included in the Gathering, Marketing, Terminalling & Storage segment.

		Nine Months Ended								Nine Months Ended
		September 30, 2006								September 30, 2005
						Gathering,								Gathering,
						Marketing,								Marketing,
						Terminalling &								Terminalling &
		Pipeline				Storage				Pipeline				Storage
		Operations				Operations				Operations				Operations(4)
		(in millions)								(in millions)
Revenues(1)		$	841.4			$	17,328.7			$	811.1			$	21,753.0
Purchases and related costs			(522.0	)			(16,945.9	)			(526.2	)			(21,496.8	)
Field operating costs (excluding LTIP charge)			(137.1	)			(120.7	)			(108.8	)			(89.0	)
LTIP charge – operations			(1.0	)			(1.7	)			(0.7	)			(1.5	)
Segment G&A expenses (excluding LTIP charge)(2)			(27.1	)			(40.7	)			(29.6	)			(30.5	)
LTIP charge – general and administrative			(10.9	)			(13.5	)			(8.7	)			(6.0	)
Segment profit		$	143.3			$	206.2			$	137.1			$	129.2
SFAS 133 mark-to-market impact(3)		$	-			$	14.8			$	-			$	(20.0	)
Maintenance capital		$	11.5			$	5.8			$	8.2			$	4.0

(1)		Includes inter-segment amounts. We have adopted EITF 04-13, which impacts the comparability of our revenues, effective April 1, 2006. Revenues include buy/sell transactions in the nine months ended September 30, 2006 of $45.3 million and $4,717.7 million and in the nine months ended September 30, 2005 of $125.8 million and $11,630.0 million in the Pipeline segment and Gathering, Marketing, Terminalling & Storage segment, respectively.
(2)		Segment general and administrative expenses (G&A) reflect direct costs attributable to each segment and an allocation of other expenses to the segments based on the business activities that existed at that time. The proportional allocations by segment require judgment by management and will continue to be based on the business activities that exist during each period.
(3)		Amounts related to SFAS 133 are included in revenues and impact segment profit. The SFAS 133 mark-to-market adjustment is primarily based upon crude oil prices (and to a lesser extent, other product prices) at the end of the period and is related to the non-effective portion of our cash flow hedges, as well as certain derivative contracts that do not qualify under SFAS 133 as cash flow hedges. The net gain or loss related to these derivative instruments is substantially offset by physical positions in future periods.
(4)		Gains/losses on foreign currency revaluation are included in the Gathering, Marketing, Terminalling & Storage segment.

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Non-GAAP Financial Measures

 

In this release, the Partnership’s EBITDA disclosure is not presented in accordance with generally accepted accounting principles and is not intended to be used in lieu of GAAP presentations of results of operations or cash provided by operating activities. EBITDA is presented because we believe it provides additional information with respect to both the performance of our fundamental business activities as well as our ability to meet our future debt service, capital expenditures and working capital requirements. We also believe that debt holders commonly use EBITDA to analyze Partnership performance. In addition, we present selected items that impact the comparability of our operating results as additional information that may be helpful to your understanding of our financial results. We consider an understanding of these selected items impacting comparability to be material to our evaluation of our operating results and prospects. Although we present selected items that we consider in evaluating our performance, you should also be aware that the items presented do not represent all items that affect comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, exchange rates, mechanical interruptions, acquisitions and numerous other factors. These types of variations are not separately identified in this release, but will be discussed in management’s discussion and analysis of operating results in our Quarterly Report on Form 10-Q.

 

A reconciliation of EBITDA to net income and cash flow from operating activities for the periods presented is included in the tables attached to this release. In addition, the Partnership maintains on its website (www.paalp.com) a reconciliation of all non-GAAP financial information, such as EBITDA, that it reconciles to the most comparable GAAP measures. To access the information, investors should click on the “Investor Relations” link on the Partnership’s home page and then the “Non-GAAP Reconciliation” link on the Investor Relations page.

 

Conference Call

The Partnership will host a conference call to discuss the results and other forward-looking items on Thursday, November 2, 2006. Specific items to be addressed in this call include:

 

 

The call will begin at 9:00 AM (Central). To participate in the call, please dial 877-709-8150, or, for international callers, 201-689-8354 at approximately 8:55 AM (Central). No password or reservation number is required.

 

Webcast Instructions

To access the Internet webcast, please go to the Partnership’s website at www.paalp.com, choose “Investor Relations”, and then choose “Conference Calls”. Following the live webcast, the call will be archived for a period of sixty (60) days on the Partnership’s website.

 

Telephonic Replay Instructions

To listen to a telephonic replay of the conference call, please dial 877-660-6853, or, for international callers, 201-612-7415, and enter acct #232 and replay #217019. The replay will be available beginning Thursday, November 2, 2006, at approximately 1:00 PM (Central) and continue until 10:59 PM (Central) Monday, November 6, 2006.

 

Plains All American Pipeline, L.P. is engaged in interstate and intrastate crude oil transportation and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and

 

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other petroleum products, in the United States and Canada. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the Partnership is also engaged in the development and operation of natural gas storage facilities. The Partnership’s common units are traded on the New York Stock Exchange under the symbol “PAA.” The Partnership is headquartered in Houston, Texas.

 

Investor Notice

Plains All American Pipeline, L.P. has filed with the Securities and Exchange Commission a registration statement on Form S-4 (as the same may be supplemented or amended, Registration No. 333-135712) containing the joint proxy statement/prospectus of Plains All American Pipeline, L.P. and Pacific Energy Partners, L.P. and other documents in relation to the merger between Plains All American Pipeline, L.P. and Pacific Energy Partners, L.P. Investors and security holders are urged to read carefully these documents because they contain important information regarding Plains All American Pipeline, L.P., Pacific Energy Partners, L.P. and the merger. A definitive joint proxy statement/prospectus has been sent to security holders of Plains All American Pipeline, L.P. and Pacific Energy Partners, L.P. seeking their approval of the transactions contemplated by the merger agreement. Investors and security holders may obtain a free copy of the definitive joint proxy statement/prospectus and other documents containing information about Plains All American Pipeline, L.P. and Pacific Energy Partners, L.P., without charge, at the SEC’s website at www.sec.gov. Copies of the definitive joint proxy statement/prospectus and the SEC filings that are incorporated by reference in the definitive joint proxy statement/prospectus may also be obtained free of charge by directing a request to the respective partnerships as follows: Information regarding Plains All American Pipeline can be obtained by contacting its investor relations department at 713-646-4100 or by accessing its website at www.paalp.com, and information regarding Pacific Energy Partners can be obtained by contacting its investor relations department at 562-728-2871 or by accessing its website at www.PacificEnergy.com.

 

Plains All American Pipeline, L.P. and Pacific Energy Partners, L.P. and the officers and directors of the respective general partners of Plains All American Pipeline, L.P. and Pacific Energy Partners, L.P. may be deemed to be participants in the solicitation of proxies from their security holders. Information about these persons can be found in Plains All American Pipeline, L.P.’s and Pacific Energy Partners, L.P.’s respective Annual Reports on Form 10-K and Form 10-K/A filed with the SEC, and additional information about such persons may be obtained from the joint proxy statement/prospectus.

 

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended.

 

Forward Looking Statements

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from results anticipated in the forward-looking statements. These risks and uncertainties include, among other things: our failure to successfully integrate the respective business operations upon completion of the merger with Pacific or our failure to successfully integrate any future acquisitions; the failure to realize the anticipated cost savings, synergies and other benefits of the proposed merger with Pacific; the success of our risk management activities; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; abrupt or severe declines or interruptions in outer continental shelf production located offshore California and transported on our pipeline system; declines in volumes shipped on the Basin Pipeline, Capline Pipeline and our other pipelines by us and third party shippers; the availability of adequate third-party production volumes for transportation and marketing in the areas in which we operate; demand for natural gas or various grades of crude oil and resulting changes in pricing conditions or transmission throughput requirements; fluctuations in refinery capacity in areas supplied by our main lines; the availability of, and our ability to consummate, acquisition or combination opportunities; our access to capital to fund additional acquisitions and our ability to obtain debt or

 

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equity financing on satisfactory terms; risks associated with operating in lines of business that are distinct and separate from our historical operations; unanticipated changes in crude oil market structure and volatility (or lack thereof); the impact of current and future laws, rulings and governmental regulations; the effects of competition; continued creditworthiness of, and performance by, counterparties; interruptions in service and fluctuations in tariffs or volumes on third party pipelines; increased costs or lack of availability of insurance; fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our Long-Term Incentive Plans; the currency exchange rate of the Canadian dollar; shortages or cost increases of power supplies, materials or labor; weather interference with business operations or project construction; general economic, market or business conditions; risks related to the development and operation of natural gas storage facilities and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of crude oil and liquefied petroleum gas discussed in the Partnership’s filings with the Securities and Exchange Commission.

 

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		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2006				2005				2006				2005
REVENUES(1)		$	4,525.8			$	8,664.4			$	18,053.6			$	22,463.6
COSTS AND EXPENSES
Purchases and related costs			4,264.0				8,464.7				17,351.4				21,922.5
Field operating costs			91.6				68.3				260.5				200.0
General and administrative expenses			33.0				26.5				92.2				74.8
Depreciation and amortization			24.2				20.0				67.1				58.1
Total costs and expenses			4,412.8				8,579.5				17,771.2				22,255.4
OPERATING INCOME			113.0				84.9				282.4				208.2
OTHER INCOME/(EXPENSE)
Equity earnings in PAA/Vulcan Gas Storage, LLC			1.3				-				2.2				-
Interest expense			(19.2	)			(15.6	)			(52.5	)			(44.4	)
Interest income and other income (expense), net			0.3				(0.3	)			0.7				0.3
Income before cumulative effect of change in accounting principle			95.4				69.0				232.8				164.1
Cumulative effect of change in accounting principle			-				-				6.3				-
NET INCOME		$	95.4			$	69.0			$	239.1			$	164.1
NET INCOME – LIMITED PARTNERS		$	84.6			$	63.9			$	212.7			$	150.8
NET INCOME – GENERAL PARTNER		$	10.8			$	5.1			$	26.4			$	13.3
BASIC NET INCOME PER LIMITED PARTNER UNIT
Income before cumulative effect of change in accounting principle		$	0.90			$	0.81			$	2.37			$	2.11
Cumulative effect of change in accounting principle			-				-				0.08				-
Basic net income per limited partner unit		$	0.90			$	0.81			$	2.45			$	2.11
DILUTED NET INCOME PER LIMITED PARTNER UNIT
Income before cumulative effect of change in accounting principle		$	0.89			$	0.79			$	2.35			$	2.07
Cumulative effect of change in accounting principle			-				-				0.08				-
Diluted net income per limited partner unit		$	0.89			$	0.79			$	2.43			$	2.07
BASIC WEIGHTED AVERAGE UNITS OUTSTANDING			79.9				68.0				77.0				67.8
DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING			80.8				69.4				77.8				68.9

(1)		Revenues include buy/sell transactions of $4.5 billion in the three months ended September 30, 2005 and $4.8 billion and $11.8 billion in the nine months ended September 30, 2006 and 2005, respectively.

		Three Months Ended								Nine Months Ended
OPERATING DATA (in thousands)(1)		September 30,								September 30,
Average Daily Volumes (barrels)		2006				2005				2006				2005
Pipeline activities:
Tariff activities
All American			50				51				49				51
Basin			324				290				323				283
BOA / CAM			168				-				57				-
Capline			183				129				149				144
Cushing to Broome			69				79				73				62
North Dakota/Trenton			94				85				88				73
West Texas/New Mexico Area Systems(2)			416				428				445				422
Canada			249				250				247				255
Other			486				437				464				424
Pipeline margin activities			93				65				89				69
Pipeline activities total			2,132				1,814				1,984				1,783
GMT&S activities:
Crude oil lease gathering			650				598				639				616
LPG sales and third party processing			55				41				60				50
Waterborne foreign crude imported			80				61				59				60
GMT&S activities total			785				700				758				726

(1)		Volumes associated with acquisitions represent total volumes transported for the number of days we actually owned the assets divided by the number of days in the period.
(2)		The aggregate of multiple systems in the West Texas/New Mexico area.

		September 30,				December 31,
		2006				2005
ASSETS
Current assets		$	2,992.2			$	1,805.2
Property and equipment, net			2,359.0				1,857.2
Pipeline linefill in owned assets			204.1				180.2
Inventory in third party assets			77.0				71.5
Investment in PAA/Vulcan Gas Storage, LLC			125.7				113.5
Goodwill			183.3				47.4
Other long-term assets, net			106.6				45.3
Total assets		$	6,047.9			$	4,120.3
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities		$	2,941.2			$	1,793.3
Long-term debt under credit facilities and other			3.6				4.7
Senior notes, net of unamortized discount			1,196.8				947.0
Other long-term liabilities and deferred credits			66.9				44.6
Total liabilities			4,208.5				2,789.6
Partners’ capital			1,839.4				1,330.7
Total liabilities and partners’ capital		$	6,047.9			$	4,120.3

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PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

FINANCIAL SUMMARY (unaudited)

 

COMPUTATION OF BASIC AND DILUTED EARNINGS PER LIMITED PARTNER UNIT

(in millions, except per unit data)