(Houston - January 14, 2009) Plains All American Pipeline, L.P. (NYSE:PAA) today announced a cash distribution of $0.8925 per unit ($3.57 per unit on an annualized basis) on all of its outstanding limited partner units. The distribution will be payable on February 13, 2009, to holders of record of such units at the close of business on February 3, 2009. The distribution represents an increase of approximately 5.0% over the quarterly distribution of $0.85 per unit paid in February 2008 and is unchanged from the November 2008 distribution level.
Greg L. Armstrong, PAA's Chairman and CEO, provided the following statement regarding the Partnership's distribution outlook in the current environment:
"In recent years, we have followed a practice of establishing a target range for the current year's distribution growth as well as our distribution growth outlook over the next several years. The target range for average annual growth established at the beginning of 2008 was five percent to eight percent. Our distribution growth during 2008 was 6.3%. The midpoint of our preliminary operating and financial guidance for 2009 indicates we will generate sufficient cash flow to support distribution growth during the coming year within the multi-year target range, while still maintaining healthy distribution coverage. Unfortunately, managing a business is more complicated than simple mathematics, especially in the current chaotic and dynamic environment.
"We ended 2008 with approximately $1 billion of unused, committed liquidity available under our various credit facilities. Although we are pleased with – and cautiously optimistic about – our current positioning, we are very cognizant of the uncertain and volatile global economic environment that presently exists. Our experiences over the last 25+ years also cause us to have a healthy respect for the unknown and the need to remain agile. In that regard, our knowledge concerning the macro elements we cannot control is insufficient at this time to either modify or reinforce this targeted range of distribution growth. Instead, we believe the most prudent course of action is to acknowledge the importance of distribution growth to our unitholders, but to refrain from setting a specific target for distribution growth in 2009.
"We believe this approach will enable PAA to maintain maximum flexibility to react to any unforeseen developments and associated challenges as well as potential opportunities that may arise. This approach also allows PAA to avoid sending potentially conflicting signals to our stakeholders. The net result is that, in addition to our ability to execute against our guidance, our distribution growth in 2009 will be driven by developments in global economic and financial markets and any resulting mid-course adjustments by PAA that are deemed appropriate in such circumstances.
"We would normally address these matters in our fourth quarter and year-end earnings release conference call. Because we have reached this decision regarding the management of our 2009 distribution growth substantially in advance of the call, we wanted to communicate our position to our stakeholders as soon as practical. We look forward to providing additional information on our outlook for 2009 in our earnings conference call scheduled for February 12, 2009."
Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. 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 is headquartered in Houston, Texas.
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: future developments and circumstances at the time distributions are declared; failure to implement or capitalize on planned internal growth projects; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; continued creditworthiness of, and performance by, our counterparties, including financial institutions and trading companies with which we do business; the success of our risk management activities; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; abrupt or severe declines or interruptions in outer continental shelf production located offshore California and transported on our pipeline system; shortages or cost increases of power supplies, materials or labor; the availability of adequate third party production volumes for transportation and marketing in the areas in which we operate and other factors that could cause declines in volumes shipped on our pipelines by us and third party shippers, such as declines in production from existing oil and gas reserves or failure to develop additional oil and gas reserves; fluctuations in refinery capacity in areas supplied by our mainlines and other factors affecting demand for various grades of crude oil, refined products and natural gas and resulting changes in pricing conditions or transportation throughput requirements; the availability of, and our ability to consummate, acquisition or combination opportunities; our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness; the successful integration and future performance of acquired assets and businesses and the 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, governmental regulations and interpretations; the effects of competition; 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; weather interference with business operations or project construction; risks related to the development and operation of natural gas storage facilities; general economic, market or business conditions; and other factors and uncertainties inherent in the transportation, storage, terminalling, and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products discussed in the Partnership's filings with the Securities and Exchange Commission.
Contacts:
Manager, Investor Relations
Roy I. Lamoreaux, 713-646-4222 or 800-564-3036
or
Vice President
A. Patrick Diamond,713-646-4487 or 800-564-3036
|