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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on May 2,20, 2005

Registration No. 333-            



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Amendment No. 1
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933


PLAINS ALL AMERICAN PIPELINE, L.P.
(Exact Name of Registrant as Specified in Its Charter)


Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

 

4610
(Primary Standard Industrial
Classification Code Number)

 

76-0582150
(I.R.S. Employer
Identification Number)



333 Clay Street, Suite 1600
Houston, Texas 77002
(713) 646-4100

(Address, Including Zip Code, and Telephone Number, including
Area Code, of Registrant's Principal Executive Offices)

Tim Moore
Vice President and General Counsel
333 Clay Street, Suite 1600
Houston, Texas 77002
(713) 646-4100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

Copies to:
David P. Oelman
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2300
Houston, Texas 77002
(713) 758-2222


Approximate date of commencement of proposed sale to the public:From time to time after this Registration Statement becomes effective.


        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    ý

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o


Title Of Each Class Of
Securities To Be Registered

Amount to be
Registered

Proposed Maximum
Offering Price
Per Unit

Proposed Maximum
Aggregate
Offering Price

Amount of
Registration Fee


Common Units representing limited partner interests19,469,207 units(1)$38.62(2)$88,499(3)

(1)
The proposed maximum offering price per unit will be determined from time to time by the registrants in connection with, and at the time of, the issuance by the registrants of the securities registered hereunder.

(2)
Estimated solely for the purpose of determining the registration fee on the basis of the average high and low prices of the common units on the New York Stock Exchange on April 18, 2005.

(3)
Of this amount $112,063 was previously paid in respect of $126,105 of unsold securities registered on Form S-3 (Registration No. 333-68446) filed by Plains All American Pipeline, L.P. on August 27, 2001, and $14,969 was previously paid in respect of $14,969 of unsold securities registered on Form S-1 (Registration No. 333-119738) filed by Plains All American Pipeline L.P. on October 14, 2004.


        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.




The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion Dated May 2,20, 2005

P R O S P E C T U S

LOGO

19,469,20719,461,702 Common Units

Plains All American Pipeline, L.P.

Representing Limited Partner Interests


        Up to 19,469,20719,461,702 of our common units may be offered from time to time by the selling unitholders named in this prospectus. The selling unitholders may sell the common units at various times and in various types of transactions, including sales in the open market, sales in negotiated transactions and sales by a combination of methods. We will not receive any proceeds from the sale of common units by the selling unitholders.

        Our common units are listed on the New York Stock Exchange under the symbol "PAA."


        Limited partnerships are inherently different from corporations. You should carefully consider each of the factors described under "Risk Factors" which begins on page 2 of this prospectus before you make an investment in the securities.

        NEITHER THE SECURITIES AND EXCHANGE COMMISION NOR ANY STATE SECURITIES COMMISION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


        In connection with certain sales of securities hereunder, a prospectus supplement may accompany this prospectus.

The date of this prospectus is [                        ], 2005



TABLE OF CONTENTS

 
ABOUT THIS PROSPECTUS
WHO WE ARE
 General
 Business Strategy
RISK FACTORS
 Risks Related to Our Business
 Risks Inherent in an Investment in Plains All American Pipeline
 Tax Risks to Common Unitholders
USE OF PROCEEDS
PRICE RANGE OF COMMON UNITS AND DISTRIBUTIONS
SELECTED HISTORICAL FINANCIAL AND OPERATING DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Introduction
 Executive Summary
 Years Ended December 31, 2004, 2003 and 2002
Acquisitions
 Critical Accounting Policies and Estimates
 Recent Accounting Pronouncements and Change in Accounting Principle
 Results of Operations
 Outlook
 Liquidity and Capital Resources
 Off-Balance Sheet Arrangements
Quantitative and Qualitative Disclosures About Market Risks
Three Months Ended March 31, 2005 and 2004
Acquisition Activities
Results of Operations
Outlook
Liquidity and Capital Resources
Commitments
 Quantitative and Qualitative Disclosures About Market Risks
BUSINESS
 General
 Business Strategy
 Financial Strategy
 Competitive Strengths
 Recent Developments
 Organizational History
 Partnership Structure and Management
 Acquisitions
 Dispositions
 Description of Segments and Associated Assets
 Major Pipeline Assets
 Gathering, Marketing, Terminalling and Storage Operations
 Customers
 Competition
 Regulation
 

i


Environmental, Health and Safety Regulation
 Operational Hazards and Insurance
 Title to Properties and Rights-of-Way
 Employees
 Litigation
 Unauthorized Trading Loss
MANAGEMENT
 Partnership Management and Governance

i


 Directors and Executive Officers
 Management Team/Canadian Officers
 Executive Compensation
 Employment Contracts and Termination of Employment and Change-in-Control Arrangements
 1998 Long-Term Incentive Plan
 2005 Long-Term Incentive Plan
 Other Equity Grants
 Compensation of Directors
 Reimbursement of Expenses of Our General Partner and its Affiliates
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDERS' MATTERS
 Beneficial Ownership of Limited Partner Interest
 Beneficial Ownership of General Partner Interest
 Equity Compensation Plan Information
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 Our General Partner
 Transactions with Related Parties
DESCRIPTION OF OUR COMMON UNITS
 Meetings/Voting
 Status as Limited Partner or Assignee
 Limited Liability
 Reports and Records
 Class B Common Units
 Class C Common Units
CASH DISTRIBUTION POLICY
 Distributions of Available Cash
 Operating Surplus and Capital Surplus
 Incentive Distribution Rights
 Effect of Issuance of Additional Units
 Quarterly Distributions of Available Cash
 Distributions From Operating Surplus
 Incentive Distribution Rights
 Distributions from Capital Surplus
 Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels
 Distribution of Cash Upon Liquidation
DESCRIPTION OF OUR PARTNERSHIP AGREEMENT
 Purpose
 Power of Attorney
 Reimbursements of Our General Partner
 Issuance of Additional Securities
 Amendments to Our Partnership Agreement
 Withdrawal or Removal of Our General Partner
 

ii


Liquidation and Distribution of Proceeds
 Change of Management Provisions
 Limited Call Right
 Indemnification
 Registration Rights
TAX CONSIDERATIONS
 Partnership Status
 Limited Partner Status

ii


 Tax Consequences of Unit Ownership
 Tax Treatment of Operations
 Disposition of Common Units
 Uniformity of Units
 Tax-Exempt Organizations and Other Investors
 Administrative Matters
 State, Local and Other Tax Considerations
SELLING UNITHOLDERS
PLAN OF DISTRIBUTION
VALIDITY OF THE COMMON UNITS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
FORWARD-LOOKING STATEMENTS
INDEX TO FINANCIAL STATEMENTS


ABOUT THIS PROSPECTUS

        This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a "shelf' registration process. Under this shelf process, the selling unitholders may sell up to 19,469,20719,461,702 of our common units. In connection with certain sales of securities hereunder, a prospectus supplement may accompany this prospectus. The prospectus supplement may also add, update or change information contained in this prospectus. Therefore, before you invest in our securities, you should read this prospectus and any attached prospectus supplements.

        In this registration statement, the terms "we," "our," "ours," and "us" refer to Plains All American Pipeline, L.P. and its subsidiaries, unless otherwise indicated or the context requires otherwise.

iii



WHO WE ARE

General

        We are a publicly traded Delaware limited partnership, formed in 1998 and 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 natural gas related petroleum products. We refer to liquefied petroleum gas and natural gas related petroleum products collectively as "LPG." We have an extensive network of pipeline transportation, storage and gathering assets in key oil producing basins and at major market hubs in the United States and Canada. Our operations can be categorized into two primary business activities: crude oil pipeline transportation operations and gathering, marketing, terminalling and storage operations.


Business Strategy

        Our principal business strategy is to capitalize on the regional crude oil supply and demand imbalances that exist in the United States and Canada by combining the strategic location and distinctive capabilities of our transportation and terminalling assets with our extensive marketing and distribution expertise to generate sustainable earnings and cash flow.

        We intend to execute our business strategy by:

        To a lesser degree, we also engage in a similar business strategy with respect to the wholesale marketing and storage of LPG, which we began as a result of an acquisition in mid-2001.



RISK FACTORS

Risks Related to Our Business

        The level of our profitability is dependent upon an adequate supply of crude oil from fields located offshore and onshore California. Production from these offshore fields has experienced substantial production declines since 1995.

        A significant portion of our segment profit is derived from pipeline transportation margins associated with the Santa Ynez and Point Arguello fields located offshore California. We expect that there will continue to be natural production declines from each of these fields as the underlying reservoirs are depleted. We estimate that a 5,000 barrel per day decline in volumes shipped from these fields would result in a decrease in annual pipeline segment profit of approximately $3.2 million. In addition, any significant production disruption from the Santa Ynez field due to production problems, transportation problems or other reasons could have a material adverse effect on our business.

        Our trading policies cannot eliminate all price risks. In addition, any non-compliance with our trading policies could result in significant financial losses.

        Generally, it is our policy that we establish a margin for crude oil purchased by selling crude oil for physical delivery to third party users, such as independent refiners or major oil companies, or by entering into a future delivery obligation under futures contracts on the NYMEX and over the counter. Through these transactions, we seek to maintain a position that is substantially balanced between purchases, on the one hand, and sales or future delivery obligations, on the other hand. Our policy is generally not to acquire and hold crude oil, futures contracts or derivative products for the purpose of speculating on price changes. These policies and practices cannot, however, eliminate all price risks. For example, any event that disrupts our anticipated physical supply of crude oil could expose us to risk of loss resulting from price changes. Moreover, we are exposed to some risks that are not hedged, including certain basis risks and price risks on certain of our inventory, such as pipeline linefill, which must be maintained in order to transport crude oil on our pipelines. In addition, we engage in a controlled trading program for up to an aggregate of 500,000 barrels of crude oil. Although this activity is monitored independently by our risk management function, it exposes us to price risks within predefined limits and authorizations.

        In addition, our trading operations involve the risk of non-compliance with our trading policies. For example, we discovered in November 1999 that our trading policy was violated by one of our former employees, which resulted in aggregate losses of approximately $181.0 million. We have taken steps within our organization to enhance our processes and procedures to detect future unauthorized trading. We cannot assure you, however, that these steps will detect and prevent all violations of our trading policies and procedures, particularly if deception or other intentional misconduct is involved.

        If we do not make acquisitions on economically acceptable terms our future growth may be limited.

        Our ability to grow is substantially dependent on our ability to make acquisitions that result in an increase in adjusted operating surplus per unit. If we are unable to make such accretive acquisitions either because (i) we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts with them, (ii) we are unable to raise financing for such acquisitions on economically acceptable terms or (iii) we are outbid by competitors, our future growth will be limited. In particular, competition for midstream assets and businesses has intensified substantially and as a result such assets and businesses have become more costly. As a result, we may not be able to complete the number or size of acquisitions that we have targeted internally or to continue to grow as quickly as we have historically.



        Our acquisition strategy requires access to new capital. Tightened capital markets or other factors which increase our cost of capital could impair our ability to grow.

        Our business strategy is substantially dependent on acquiring additional assets or operations. We continuously consider and enter into discussions regarding potential acquisitions. These transactions can be effected quickly, may occur at any time and may be significant in size relative to our existing assets and operations. Any material acquisition will require access to capital. Any limitations on our access to capital or increase in the cost of that capital could significantly impair our ability to execute our acquisition strategy. Our ability to maintain our targeted credit profile, including maintaining our credit ratings, could impact our cost of capital as well as our ability to execute our acquisition strategy.

        Our acquisition strategy involves risks that may adversely affect our business.

        Any acquisition involves potential risks, including:

        Any of these factors could adversely affect our ability to achieve anticipated levels of cash flows from our acquisitions, realize other anticipated benefits and our ability to pay distributions or meet our debt service requirements.

        The nature of our assets and business could expose us to significant compliance costs and liabilities.

        Our operations involving the storage, treatment, processing, and transportation of liquid hydrocarbons including crude oil are subject to stringent federal, state, and local laws and regulations governing the discharge of materials into the environment, and otherwise relating to protection of the environment, operational safety and related matters. Compliance with these laws and regulations increases our overall cost of business, including our capital costs to construct, maintain and upgrade equipment and facilities, or claims for damages to property or persons resulting from our operations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of investigatory and remedial liabilities, the issuance of injunctions that may restrict or prohibit our operations, or claims of damages to property or persons resulting from our operations. The laws and regulations applicable to our operations are subject to change, and we cannot provide any assurance that compliance with current and future laws and regulations will not have a material effect on our results of operations or earnings. A discharge of hazardous liquids into the environment could, to the extent such event is not insured, subject us to substantial expense, including both the cost to comply with applicable laws and regulations and liability to private parties for personal injury or property damage.

        The profitability of our pipeline operations depends on the volume of crude oil shipped.

        Third party shippers generally do not have long term contractual commitments to ship crude oil on our pipelines. A decision by a shipper to substantially reduce or cease to ship volumes of crude oil on our pipelines could cause a significant decline in our revenues. For example, we estimate that an



average 20,000 barrel per day variance in the Basin Pipeline System within the current operating window, equivalent to an approximate 7% volume variance on that system, would change annualized segment profit by approximately $1.8$1.7 million. In addition, we estimate that an average 10,000 barrel per day variance on the Capline Pipeline System, equivalent to an approximate 7%6% volume variance on that system, would change annualized segment profit by approximately $1.5$1.4 million.

        The success of our business strategy to increase and optimize throughput on our pipeline and gathering assets is dependent upon our securing additional supplies of crude oil.

        Our operating results are dependent upon securing additional supplies of crude oil from increased production by oil companies and aggressive lease gathering efforts. The ability of producers to increase production is dependent on the prevailing market price of oil, the exploration and production budgets of the major and independent oil companies, the depletion rate of existing reservoirs, the success of new wells drilled, environmental concerns, regulatory initiatives and other matters beyond our control. There can be no assurance that production of crude oil will rise to sufficient levels to cause an increase in the throughput on our pipeline and gathering assets.

        Our operations are dependent upon demand for crude oil by refiners in the Midwest and on the Gulf Coast. Any decrease in this demand could adversely affect our business.

        Demand for crude oil is dependent upon the impact of future economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation or technological advances in fuel economy and energy generation devices, all of which could reduce demand. Demand also depends on the ability and willingness of shippers having access to our transportation assets to satisfy their demand by deliveries through those assets, and any decrease in this demand could adversely affect our business.

        We face intense competition in our gathering, marketing, terminalling and storage activities.

        Our competitors include other crude oil pipelines, the major integrated oil companies, their marketing affiliates, and independent gatherers, brokers and marketers of widely varying sizes, financial resources and experience. Some of these competitors have capital resources many times greater than ours and control greater supplies of crude oil. We estimate that a $0.01 variance in the average segment profit per barrel would have an approximate $2.6$2.4 million annual effect on segment profit.

        The profitability of our gathering and marketing activities is generally dependent on the volumes of crude oil we purchase and gather.

        To maintain the volumes of crude oil we purchase, we must continue to contract for new supplies of crude oil to offset volumes lost because of natural declines in crude oil production from depleting wells or volumes lost to competitors. Replacement of lost volumes of crude oil is particularly difficult in an environment where production is low and competition to gather available production is intense. Generally, because producers experience inconveniences in switching crude oil purchasers, such as delays in receipt of proceeds while awaiting the preparation of new division orders, producers typically do not change purchasers on the basis of minor variations in price. Thus, we may experience difficulty acquiring crude oil at the wellhead in areas where there are existing relationships between producers and other gatherers and purchasers of crude oil. We estimate that a 15,000 barrel per day decrease in barrels gathered by us would have an approximate $3.0$4.3 million per year negative impact on segment profit. This impact is based on a reasonable margin throughout various market conditions. Actual margins vary based on the location of the crude oil, the strength or weakness of the market and the grade or quality of crude oil.



        We are exposed to the credit risk of our customers in the ordinary course of our gathering and marketing activities.

        There can be no assurance that we have adequately assessed the credit worthiness of our existing or future counterparties or that there will not be an unanticipated deterioration in their credit worthiness, which could have an adverse impact on us.

        In those cases in which we provide division order services for crude oil purchased at the wellhead, we may be responsible for distribution of proceeds to all parties. In other cases, we pay all of or a portion of the production proceeds to an operator who distributes these proceeds to the various interest owners. These arrangements expose us to operator credit risk, and there can be no assurance that we will not experience losses in dealings with other parties.

        Our pipeline assets are subject to federal, state and provincial regulation.

        Our domestic interstate common carrier pipelines are subject to regulation by the Federal Energy Regulatory Commission (FERC) under the Interstate Commerce Act. The Interstate Commerce Act requires that tariff rates for petroleum pipelines be just and reasonable and non-discriminatory. We are also subject to the Pipeline Safety Regulations of the U.S. Department of Transportation. Our intrastate pipeline transportation activities are subject to various state laws and regulations as well as orders of regulatory bodies.

        Our Canadian pipeline assets are subject to regulation by the National Energy Board and by provincial agencies. With respect to a pipeline over which it has jurisdiction, each of these Canadian agencies has the power to determine the rates we are allowed to charge for transportation on such pipeline. The extent to which regulatory agencies can override existing transportation contracts has not been fully decided.

        Our pipeline systems are dependent upon their interconnections with other crude oil pipelines to reach end markets.

        Reduced throughput on these interconnecting pipelines as a result of testing, line repair, reduced operating pressures or other causes could result in reduced throughput on our pipeline systems that would adversely affect our profitability.

        Fluctuations in demand can negatively affect our operating results.

        Fluctuations in demand for crude oil, such as caused by refinery downtime or shutdown, can have a negative effect on our operating results. Specifically, reduced demand in an area serviced by our transmission systems will negatively affect the throughput on such systems. Although the negative impact may be mitigated or overcome by our ability to capture differentials created by demand fluctuations, this ability is dependent on location and grade of crude oil, and thus is unpredictable.

        The terms of our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities.

        As of DecemberMarch 31, 2004,2005, our total outstanding long-term debt was approximately $949$930 million. Various limitations in our indebtedness may reduce our ability to incur additional debt, to engage in some transactions and to capitalize on business opportunities. Any subsequent refinancing of our current indebtedness or any new indebtedness could have similar or greater restrictions.

        Changes in currency exchange rates could adversely affect our operating results.

        Because we conduct operations in Canada, we are exposed to currency fluctuations and exchange rate risks that may adversely affect our results of operations.



        Cash distributions are not guaranteed and may fluctuate with our performance and the establishment of financial reserves.

        Because distributions on the common units are dependent on the amount of cash we generate, distributions may fluctuate based on our performance. The actual amount of cash that is available to be distributed each quarter will depend on numerous factors, some of which are beyond our control and the control of the general partner. Cash distributions are dependent primarily on cash flow, including cash flow from financial reserves and working capital borrowings, and not solely on profitability, which is affected by non-cash items. Therefore, cash distributions might be made during periods when we record losses and might not be made during periods when we record profits.


Risks Inherent in an Investment in Plains All American Pipeline

        Cost reimbursements due to our general partner may be substantial and will reduce our cash available for distribution to you.

        Prior to making any distribution on the common units, we will reimburse our general partner and its affiliates, including officers and directors of the general partner, for all expenses incurred on our behalf. The reimbursement of expenses and the payment of fees could adversely affect our ability to make distributions. The general partner has sole discretion to determine the amount of these expenses. In addition, our general partner and its affiliates may provide us services for which we will be charged reasonable fees as determined by the general partner.

        You may not be able to remove our general partner even if you wish to do so.

        Our general partner manages and operates Plains All American Pipeline. Unlike the holders of common stock in a corporation, you will have only limited voting rights on matters affecting our business. You will have no right to elect the general partner or the directors of the general partner on an annual or other continuing basis.

        In addition, the following provisions of our partnership agreement may discourage a person or group from attempting to remove our general partner or otherwise change our management:

        As a result of these provisions, the price at which the common units will trade may be lower because of the absence or reduction of a takeover premium in the trading price.

        We may issue additional common units without your approval, which would dilute your existing ownership interests.

        Our general partner may cause us to issue an unlimited number of common units, without your approval. The issuance of additional common units or other equity securities of equal or senior rank will have the following effects:


        We may also issue at any time an unlimited number of equity securities ranking junior or senior to the common units without the approval of the unitholders.

        Our general partner has a limited call right that may require you to sell your units at an undesirable time or price.

        If at any time our general partner and its affiliates own 80% or more of the common units, the general partner will have the right, but not the obligation, which it may assign to any of its affiliates, to acquire all, but not less than all, of the remaining common units held by unaffiliated persons at a price generally equal to the then current market price of the common units. As a result, you may be required to sell your common units at a time when you may not desire to sell them or at a price that is less than the price you would like to receive. You may also incur a tax liability upon a sale of your common units.

        You may not have limited liability if a court finds that unitholder actions constitute control of our business.

        Under Delaware law, you could be held liable for our obligations to the same extent as a general partner if a court determined that the right of unitholders to remove our general partner or to take other action under our partnership agreement constituted participation in the "control" of our business.

        Our general partner generally has unlimited liability for our obligations, such as our debts and environmental liabilities, except for those contractual obligations that are expressly made without recourse to our general partner.

        In addition, Section 17-607 of the Delaware Revised Uniform Limited Partnership Act provides that under some circumstances, a unitholder may be liable to us for the amount of a distribution for a period of three years from the date of the distribution.

        Conflicts of interest could arise among our general partner and us or the unitholders.

        These conflicts may include the following:



Tax Risks to Common Unitholders

        You should read "Tax Considerations" for a more complete discussion of the following expected material federal income tax consequences of owning and disposing of common units.

        The IRS could treat us as a corporation for tax purposes, which would substantially reduce the cash available for distribution to you.

        The anticipated after-tax benefit of an investment in the common units depends largely on our being treated as a partnership for federal income tax purposes. We have not requested, and do not plan to request, a ruling from the IRS on this or any other matter affecting us.

        If we were classified as a corporation for federal income tax purposes, we would pay federal income tax on our income at the corporate tax rate, which is currently a maximum of 35%. Distributions to you would generally be taxed again to you as corporate distributions, and no income, gains, losses, deductions or credits would flow through to you. Because a tax would be imposed upon us as a corporation, the cash available for distribution to you would be substantially reduced. Treatment of us as a corporation would result in a material reduction in the after-tax return to the unitholders, likely causing a substantial reduction in the value of the common units.

        Current law may change so as to cause us to be taxed as a corporation for federal income tax purposes or otherwise subject us to entity-level taxation. In addition, because of widespread state budget deficits, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise or other forms of taxation. If any state were to impose a tax upon us as an entity, the cash available for distribution to you would be reduced. Our partnership agreement provides that, if a law is enacted or existing law is modified or interpreted in a manner that subjects us to taxation as a corporation or otherwise subjects us to entity-level taxation for federal, state or local income tax purposes, then the minimum quarterly distribution and the target distribution levels will be decreased to reflect that impact on us.

        A successful IRS contest of the federal income tax positions we take may adversely impact the market for common units.

        We have not requested a ruling from the IRS with respect to any matter affecting us. The IRS may adopt positions that differ from the conclusions of our counsel expressed in this registration statement or from the positions we take. It may be necessary to resort to administrative or court proceedings to sustain our counsel's conclusions or the positions we take. A court may not concur with our counsel's conclusions or the positions we take. Any contest with the IRS may materially and adversely impact the market for common units and the price at which they trade. In addition, the costs of any contest with the IRS, principally legal, accounting and related fees, will be borne by us and directly or indirectly by the unitholders and the general partner.

        You may be required to pay taxes even if you do not receive any cash distributions.

        You will be required to pay federal income taxes and, in some cases, state and local income taxes on your share of our taxable income even if you do not receive any cash distributions from us. You may not receive cash distributions from us equal to your share of our taxable income or even equal to the actual tax liability that results from your share of our taxable income.

        Tax gain or loss on disposition of common units could be different than expected.

        If you sell your common units, you will recognize gain or loss equal to the difference between the amount realized and your tax basis in those common units. Prior distributions in excess of the total net taxable income you were allocated for a common unit, which decreased your tax basis in that common unit, will, in effect, become taxable income to you if the common unit is sold at a price greater than your tax basis in that common unit, even if the price you receive is less than your original cost. A



substantial portion of the amount realized, whether or not representing gain, may be ordinary income to you. Should the IRS successfully contest some positions we take, you could recognize more gain on the sale of units than would be the case under those positions, without the benefit of decreased income in prior years. Also, if you sell your units, you may incur a tax liability in excess of the amount of cash you receive from the sale.

        If you are a tax-exempt entity, a regulated investment company or an individual not residing in the United States, you may have adverse tax consequences from owning common units.

        Investment in common units by tax-exempt entities, regulated investment companies or mutual funds and foreign persons raises issues unique to them. For example, virtually all of our income allocated to organizations exempt from federal income tax, including individual retirement accounts and other retirement plans, will be unrelated business taxable income and will be taxable to them. Recent legislation treats net income derived from the ownership of certain publicly traded partnerships (including us) as qualifying income to a regulated investment company. However, this legislation is only effective for taxable years beginning after October 22, 2004, the date of enactment. For taxable years beginning on or before the date of enactment, very little of our income will be qualifying income to a regulated investment company. Distributions to foreign persons will be reduced by withholding taxes at the highest effective U.S. federal income tax rate for individuals, and foreign persons will be required to file federal income tax returns and pay tax on their share of our taxable income.

        We treat a purchaser of units as having the same tax benefits without regard to the units purchased. The IRS may challenge this treatment, which could adversely affect the value of the units.

        Because we cannot match transferors and transferees of common units, we have adopted depreciation and amortization positions that do not conform with all aspects of the Treasury regulations. A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to you. It also could affect the timing of these tax benefits or the amount of gain from your sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to your tax returns. Please read "Tax Considerations—Uniformity of Units" in this prospectus for further discussion of the effect of the depreciation and amortization positions we have adopted.

        You will likely be subject to foreign, state and local taxes in jurisdictions where you do not live as a result of an investment in units.

        In addition to federal income taxes, you will likely be subject to other taxes, including foreign taxes, state and local taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or own property and in which you do not reside. We own property and conduct business in Canada and in most states in the United States. You may be required to file Canadian federal income tax returns and to pay Canadian federal and provincial income taxes and to file state and local income tax returns and pay state and local income taxes in many or all of the jurisdictions in which we do business or own property. Further, you may be subject to penalties for failure to comply with those requirements. It is your responsibility to file all federal, state, local and foreign tax returns. Our counsel has not rendered an opinion on the foreign, state or local tax consequences of an investment in the common units.



USE OF PROCEEDS

        We will not receive any proceeds from the sale of common units by the selling unitholders.



PRICE RANGE OF COMMON UNITS AND DISTRIBUTIONS

        As of April 18,May 16, 2005, there were 67,293,10867,914,576 common units outstanding, held by approximately 32,000 holders of record, including common units held in street name. The number of common units outstanding on this date includes the 3,245,700 Class C common units and the 1,307,190 Class B common units that converted in February 2005. The common units are traded on the New York Stock Exchange under the symbol "PAA."

        The following table sets forth, for the periods indicated, the high and low sales prices for the common units, as reported on the New York Stock Exchange Composite Transactions Tape, and quarterly cash distributions declared per common unit. The last reported sale price of common units on the New York Stock Exchange on April 18,May 16, 2005 was $38.84$40.20 per common unit.


 Price Range
  
 Price Range
  

 Cash Distributions
per Unit(1)

 Cash Distributions
per Unit(1)


 High
 Low
 High
 Low
2003            
First Quarter $26.90 $24.20 $0.5500 $26.90 $24.20 $0.5500
Second Quarter 31.48 24.65 0.5500 31.48 24.65 0.5500
Third Quarter 32.49 29.10 0.5500 32.49 29.10 0.5500
Fourth Quarter 32.82 29.76 0.5625 32.82 29.76 0.5625

2004

 

 

 

 

 

 

 

 

 

 

 

 
First Quarter $35.23 $31.18 $0.5625 $35.23 $31.18 $0.5625
Second Quarter 36.13 27.25 0.5775 36.13 27.25 0.5775
Third Quarter 35.98 31.63 0.6000 35.98 31.63 0.6000
Fourth Quarter 37.99 34.51 0.6125 37.99 34.51 0.6125

2005

 

 

 

 

 

 

 

 

 

 

 

 
First Quarter $40.98 $36.50 $0.6375 $40.98 $36.50 $0.6375
Second Quarter (through April 18, 2005) $39.61 $38.00 (2)
Second Quarter (through May 16, 2005) $42.77 $38.00 (2)

(1)
Represents cash distributions attributable to the quarter and paid within 45 days after the quarter.

(2)
The distributions attributable to this quarter have not been declared or paid.


SELECTED HISTORICAL FINANCIAL AND OPERATING DATA

        We have derived the historical financial information and operating data below from our audited consolidated financial statements as of and for the years ended December 31, 2004, 2003, 2002, 2001, and 2000.2000 and from our unaudited financial statements as of and for the three months ended March 31, 2005 and 2004. The selected financial data should be read in conjunction with the consolidated financial statements, including the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this prospectus.


 Year Ended December 31,
  Three Months Ended March 31,
 Year Ended December 31,
 

 2004
 2003
 2002
 2001
 2000
  2005
 2004
 2004
 2003
 2002
 2001
 2000
 

 (in millions except per unit data)

  (in millions except per unit data)

 
Statement of operations data:                                 
Revenues(10) $20,975.5 $12,589.8 $8,384.2 $6,868.2 $6,641.2 
Cost of sales and field operations (excluding LTIP charge)(10) (20,641.1) (12,366.6) (8,209.9) (6,720.9) (6,506.5)
Revenues(1) $6,638.5 $3,804.6 $20,975.5 $12,589.8 $8,384.2 $6,868.2 $6,641.2 
Cost of sales and field operations (excluding LTIP charge)(1)  (6,549.7) (3,731.2) (20,641.1) (12,366.6) (8,209.9) (6,720.9) (6,506.5)
Unauthorized trading losses and related expenses     (7.0)              (7.0)
Inventory valuation adjustment (2.0)   (5.0)        (2.0)     (5.0)  
LTIP charge—operations(1)(2) (0.9) (5.7)      (0.3) (0.6) (0.9) (5.7)      
General and administrative expenses (excluding LTIP charge) (75.8) (50.0) (45.7) (46.6) (40.8)  (20.2) (15.5) (75.8) (50.0) (45.7) (46.6) (40.8)
LTIP charge—general and administrative(1)(2) (7.0) (23.1)      (1.9) (3.7) (7.0) (23.1)      
Depreciation and amortization (67.2) (46.8) (34.0) (24.3) (24.5)  (19.1) (13.1) (67.2) (46.8) (34.0) (24.3) (24.5)
 
 
 
 
 
  
 
 
 
 
 
 
 
Total costs and expenses (20,794.0) (12,492.3) (8,289.6) (6,796.8) (6,578.8)  (6,591.2) (3,764.1) (20,794.0) (12,492.3) (8,289.6) (6,796.8) (6,578.8)
Gain on sale of assets 0.6 0.6  1.0 48.2       0.6  0.6    1.0  48.2 
Asset impairment (2.0)           (2.0)        
 
 
 
 
 
  
 
 
 
 
 
 
 
Operating income 180.1 98.2 94.6 72.4 110.6   47.3  40.5  180.1  98.2  94.6  72.4  110.6 
Interest expense (46.7) (35.2) (29.1) (29.1) (28.7)  (14.6) (9.5) (46.7) (35.2) (29.1) (29.1) (28.7)
Interest income and other, net(2)(3) (0.3) (3.6) (0.2) 0.4 (4.4)  0.1    (0.3) (3.6) (0.2) 0.4  (4.4)
 
 
 
 
 
  
 
 
 
 
 
 
 
Income from continuing operations before cumulative effect of change in accounting principle(3)(4) $133.1 $59.4 $65.3 $43.7 $77.5  $32.8 $31.0 $133.1 $59.4 $65.3 $43.7 $77.5 
 
 
 
 
 
  
 
 
 
 
 
 
 
Basic net income per limited partner unit before cumulative effect of change in accounting principle(3)(4) $1.94 $1.01 $1.34 $1.12 $2.13  $0.43 $0.49 $1.94 $1.01 $1.34 $1.12 $2.13 
 
 
 
 
 
  
 
 
 
 
 
 
 
Diluted net income per limited partner unit before cumulative effect of change in accounting principle(3)(4) $1.94 $1.00 $1.34 $1.12 $2.13  $0.43 $0.49 $1.94 $1.00 $1.34 $1.12 $2.13 
 
 
 
 
 
  
 
 
 
 
 
 
 
Basic weighted average number of limited partner units outstanding 63.3 52.7 45.5 37.5 34.4   67.5  58.4  63.3  52.7  45.5  37.5  34.4 
Diluted weighted average number of limited partner units outstanding 63.3 53.4 45.5 37.5 34.4   68.2  59.0  63.3  53.4  45.5  37.5  34.4 

Balance sheet data (at end of period):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Total assets $3,160.4 $2,095.6 $1,666.6 $1,261.2 $885.8  $3,934.2 $2,162.0 $3,160.4 $2,095.6 $1,666.6 $1,261.2 $885.8 
Total long-term debt(4)(5) 949.0 519.0 509.7 354.7 320.0   930.2  687.8  949.0  519.0  509.7  354.7  320.0 
Total debt 1,124.5 646.3 609.0 456.2 321.3   1,491.2  702.4  1,124.5  646.3  609.0  456.2  321.3 
Partners' capital 1,070.2 746.7 511.6 402.8 214.0   1,010.6  733.1  1,070.2  746.7  511.6  402.8  214.0 

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Maintenance capital expenditures $11.3 $7.6 $6.0 $3.4 $1.8  $4.0 $1.7 $11.3 $7.6 $6.0 $3.4 $1.8 
Net cash provided by (used in) operating activities(5)(6) 104.0 115.3 185.0 (16.2) (33.5)  (271.8) 133.0  104.0  115.3  185.0  (16.2) (33.5)
Net cash provided by (used in) investing activities(5)(6) (651.2) (272.1) (374.9) (263.2) 211.0   (61.7) (155.9) (651.2) (272.1) (374.9) (263.2) 211.0 
Net cash provided by (used in) financing activities 554.5 157.2 189.5 279.5 (227.8)  342.6  21.1  554.5  157.2  189.5  279.5  (227.8)
Declared distributions per limited partner unit(8)(9) 2.30 2.19 2.11 1.95 1.83   0.61  0.56  2.30  2.19  2.11  1.95  1.83 



 Year Ended December 31,

 Three Months Ended March 31,
 Year Ended December 31,


 2004
 2003
 2002
 2001
 2000

 2005
 2004
 2004
 2003
 2002
 2001
 2000
Operating Data:Operating Data:          Operating Data:              
Volumes (thousands of barrels per day)(9)          
Volumes (thousands of barrels per day)(10)Volumes (thousands of barrels per day)(10)              
Pipeline segment:Pipeline segment:          Pipeline segment:              
Tariff activities          Tariff activities              
 All American 54 59 65 69 74 All American 54 55 54 59 65 69 74
 Link acquisition 283 N/A N/A N/A N/A Basin 277 275 265 263 93 N/A N/A
 Capline 123 N/A N/A N/A N/A Capline(11) 160 54 123 N/A N/A N/A N/A
 Basin 265 263 93 N/A N/A West Texas/New Mexico Area Systems(12) 401 209 338 195 110 84 75
 Other domestic 424 299 219 144 130 Canada 268 240 263 203 187 132 N/A
 Canada 263 203 187 132 N/A Other 494 143 369 104 109 60 55
Pipeline margin activities 74 78 73 61 60Pipeline margin activities 75 72 74 78 73 61 60
 
 
 
 
 
 
 
 
 
 
 
 
 Total 1,486 902 637 406 264 Total 1,729 1,048 1,486 902 637 406 264
 
 
 
 
 
 
 
 
 
 
 
 
Gathering, marketing, terminalling and storage segment:Gathering, marketing, terminalling and storage segment:          Gathering, marketing, terminalling and storage segment:              
Crude oil lease gathering 589 437 410 348 262Crude oil lease gathering 622 460 589 437 410 348 262
Crude oil bulk purchases 148 90 68 46 28Crude oil bulk purchases 157 122 148 90 68 46 28
 
 
 
 
 
 
 
 
 
 
 
 
 Total 737 527 478 394 290 Total 779 582 737 527 478 394 290
 
 
 
 
 
 
 
 
 
 
 
 
LPG salesLPG sales 48 38 35 19 N/ALPG sales 84 59 48 38 35 19 N/A
 
 
 
 
 
 
 
 
 
 
 
 

(1)
Includes buy/sell transactions, see Note 2 "Summary of Significant Accounting Policies" in the "Notes to the Consolidated Financial Statements", which begin at page F-25.
(2)
Compensation expense related to our 2005 Long-Term Incentive Plan ("2005 LTIP") and our 1998 Long TermLong-Term Incentive Plan ("1998 LTIP"), see "Management—2005 Long-Term Incentive Plan" and "Management—1998 Long TermLong-Term Incentive Plan—Phantom Units."

(2)(3)
The 2000 period includes $15.1 million related to losses on the early extinguishment of debt previously classified as an extraordinary item. Effective with our adoption of Statement of Financial Accounting Standards ("SFAS") 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections" in January 2003, such items are now shown as impacting income from continuing operations. As a result of this reclassification, basic and diluted net income per limited partner unit before cumulative effect of change in accounting principle for 2000 was reduced by $0.44. In addition, effective with the issuance of the Emerging Issues Task Force Issue No. 03-06 ("EITF 03-06"), "Participating Securities and the Two Class Method under FASB Statement No. 128," the 2000 amount was further reduced by $0.07.

(3)(4)
Income from continuing operations before cumulative effect of change in accounting principle pro forma for the impact of our January 1, 2004 change in our method of accounting for pipeline linefill in third party assets would have been $61.4 million, $64.8 million, $38.4 million and $78.2 million for each of the four years ended December 31, 2003, respectively. In addition, basic net income per limited partner unit before cumulative effect of change in accounting principle would have been $1.05 ($1.04 diluted), $1.33 ($1.33 diluted), $0.97 ($0.97 diluted) and $2.15 ($2.15 diluted) for each of the four years ended December 31, 2003, respectively.

(4)(5)
Includes current maturities of long-term debt of $9.0 million and $3.0 million at December 31, 2002 and 2001, respectively, classified as long-term because of our ability and intent to refinance these amounts under our long-term revolving credit facilities.

(5)(6)
In conjunction with the change in accounting principle we adopted as of January 1, 2004, we have reclassified cash flows for the years 2003 and prior associated with purchases and sales of linefill on assets that we own as cash flows from investing activities instead of the historical classification as cash flows from operating activities.

(6)(7)
Distributions represent those declared and paid in the applicable period.

(7)(8)
No distributions were declared or paid on subordinated units in the first quarter of 2000. A distribution of $0.45 per unit was declared and paid to holders of common units in that period.

(8)(9)
Our general partner is entitled to receive 2% proportional distributions and also incentive distributions if the amount we distribute with respect to any quarter exceeds levels specified in our partnership agreement. See Note 6 "Partners' Capital and Distributions" in the "Notes to the Consolidated Financial Statements", which begin at page F-10.F-25.

(9)(10)
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.

(10)(11)
Includes buy/sell transactions, see Note 2 "SummaryCapline volumes averaged approximately 160,000 barrels per day for March 2004, which was the only month during the first quarter of Significant Accounting Policies"2004 in which we owned the system.

(12)
The aggregate of ten systems in the "Notes to the Consolidated Financial Statements", which begin at page F-10.West Texas/New Mexico area.


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

        The following discussion is intended to provide investors with an understanding of our financial condition and results of our operations for the years ended December 31, 2004, 2003 and 2002, as well as the three month periods ended March 31, 2005 and 2004, and should be read in conjunction with our historical consolidated financial statements and accompanying notes.

        Our discussion and analysis includes the following:


Executive Summary

        Plains All American Pipeline, L.P. is a Delaware limited partnership formed in September of 1998. Our operations are conducted directly and indirectly through our operating subsidiaries, Plains Marketing, L.P., Plains Pipeline, L.P. and Plains Marketing Canada, L.P. We are 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 other petroleum products. We refer to liquified petroleum gas and other petroleum products collectively as "LPG." We have an extensive network of pipeline transportation, terminalling, storage and gathering assets in key oil producing basins and at major market hubs in the United States and Canada.

        We are one of the largest midstream crude oil companies in North America. As of December 31, 2004, we owned approximately 15,000 miles of active crude oil pipelines, approximately 37 million barrels of active terminalling and storage capacity and over 400 transport trucks. Currently, we handle an average of over 2.42.9 million barrels per day of physical crude oil through our extensive network of assets located in major oil producing regions of the United States and Canada. Our operations consist of two operating segments: (i) pipeline operations ("Pipeline Operations") and (ii) gathering, marketing, terminalling and storage operations ("GMT&S"). Through our pipeline segment, we engage in interstate and intrastate crude oil pipeline transportation and certain related margin activities. Through our GMT&S segment, we engage in purchases and resales of crude oil and LPG at various points along the distribution chain and we operate certain terminalling and storage assets.




Years Ended December 31, 2004, 2003 and 2002

        During 2004, we recognized net income and earnings per limited partner unit of $130.0 million and $1.89, respectively, both of which were substantial increases over 2003 and 2002. The results for 2004 as compared to the two previous years include significant contributions from acquisitions completed during 2003 and 2004.


        The following significant activities impacted our operations, operating results or our financial position during 2004: