Ladies and gentlemen, thank you for standing by, and welcome to the PAA and PNG First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Dan Bach. Please go ahead.

Good morning. My name is Dan Bach, Manager of Investor Relations. I want to welcome you to Plains All American Pipeline and PAA Natural Gas Storage's First Quarter Results Conference Call. Throughout the call, we may reference the companies by their respective New York Stock Exchange ticker symbols of PAA, or Plains All American Pipeline and PNG, for PAA Natural Gas Storage. During today's call, in addition to reviewing the results of the prior period, we will provide forward-looking comments on the partnership's outlook for the future, which may include words such as believe, estimate, expect, anticipate or other words that indicate a forward view. The partnerships intend to avail themselves of applicable safe harbor precepts and direct you to the risks and warnings set forth in the partnership's most recently filed prospectus, 10-K, 10-Q, 8-K and other current and future filings with the Securities and Exchange Commission. In addition, we encourage you to visit our website at www.paalp.com, and www.pnglp.com, and in particular, the sections entitled Non-GAAP Reconciliations, which presents certain commonly used non-GAAP financial measures such as EBIT and EBITDA, which may be used here today in the prepared remarks or in the Q&A session. This section of the website also reconciles the non-GAAP financial measures to the most directly comparable GAAP financial measures, and includes a table of selected items that impact comparability with respect to the partnership's recorded financial information. Any reference during today's call to adjusted EBITDA, adjusted net income and the like, is a reference to the financial measure, excluding the effect of selected items impacting comparability. Also for PAA, all references to net income are references to net income attributable to Plains. Today's conference call will be chaired by Greg L. Armstrong, Chairman and CEO of PAA and PNG. Also participating in the call are Harry Pefanis, President and COO of PAA and Vice Chairman of PNG; Dean Liollio, President of PNG; and Al Swanson, CFO of PAA and PNG. Prior to turning the call over to Greg, I want to mention that we'll be holding our annual Analyst and Investor Meeting on Thursday, June 9, in downtown Houston. The meeting will begin with lunch at noon, followed by presentations from 1 to around 5:30. We intend to have several members of the management team present and available for questions. If you have an interest in accounting and have not yet received materials on the meeting, please call either Roy Lamoreaux or myself. I will now turn the call over to Greg.

Thanks, Dan. Good morning and welcome to everyone. In addition to Harry, Dean, Al and Dan, we also have several other members of our management team present and available for the question-and-answer session. Roy Lamoureux, our Director of Investor Relations is out of the office today on location. As a reminder, the slide presentation we will be referring to in this call is available on our websites, our 2 websites at www.paalp.com and www.pnglp.com. During today's call, we will discuss PAA's first quarter operating and financial results, our 2011 capital program and acquisition activities, our financial position and our updated guidance for the second quarter and remainder of 2011. In an abbreviated fashion, we will also address summary information for PAA Natural Gas storage or PNG. As many of you are aware, PNG is a separate publicly-traded MLP, focused exclusively on the Natural Gas Storage business. PAA owns 100% of PNG's general partner and 62% interest in -- limited partner interest for an aggregate 64% ownership interest, and thus, we consolidate PNG into PAA's financial statements. The primary purpose of today's call is to address our first quarter performance and our outlook for the rest of the year. However, late last week we experienced a release of oil from our Rainbow Pipe Line system in Canada. Before we discuss our quarterly results, I wanted to provide some comments in context for the Rainbow release, and thus enable us to remain focused on the primary purpose for today's call. On Friday, April 29, we shut in the northern portion of the Rainbow Pipe Line after detecting a crude oil release at a point that is north of our Nempsee [ph] station. We immediately notified the appropriate regulatory agencies, and lost a large very comprehensive response. The volume of the spill is…

Thanks, Greg. I'll now review our first quarter operating results compared to the midpoint of our guidance issued on February 9, 2011. I'll discuss the operational assumptions used to generate our guidance for 2011. I'll discuss our expansion capital program and our acquisition activities. Dean will cover the PNG specific information in a moment. As shown on Slide 5, adjusted segment profit for the Transportation segment was $143 million or $0.53 per barrel, which is in line with our guidance for the quarter. Volumes for the segment of approximately $3 million barrels per day were also in line with our guidance. Adjusted segment profit for the Facilities segment was $87 million, or $0.37 per barrel, which total is about $13 million above the midpoint of our guidance. The primary drivers to the overall performance were the favorable performance of -- from PNG and the recognition of inventory gains associated with the annual proving of certain of our LPG storage captives. Segment volumes were 77 million barrels, and they were also in line with our guidance. Adjusted segment profits of the Supply and Logistics segment was $117 million, or about $1.46 per barrel. The segment profit was about $38 million above the midpoint of our guidance. And during the quarter, the segment benefited from increased crude oil gathering volumes and increased optimization opportunities that were captured. In addition, we're able to lower our minimum operating inventory requirements by approximately 190,000 barrels during the quarter, and the gain from the disposition of this inventory contributed to the over-performance in this segment. Total volumes for the segment were in line with our guidance, however there were some ups and downs. Our least gathering volumes were approximately 23,000 barrels a day more than our guidance, while both waterborne foreign volumes and LPG volumes were…

Thanks, Harry. In my part of the call, I will review our first quarter operating and financial results, provide an update on operational activities at each of our assets, and share a few comments about our second quarter guidance and the outlook for the remainder of 2011. As shown on Slide 9, PNG announced solid first quarter 2011 results, including adjusted EBITDA of $19.5 million, adjusted net income of $12.2 million, and adjusted net income per diluted unit of $0.20. Each of which reflect performance above the high-end of our guidance range. Relative to the midpoint of guidance, this over-performance is due to Hub Services and Firm Storage Services that were higher than forecast and slightly lower expenses. A portion of the higher Hub Services that's due to the accelerated realization of certain short-term opportunities that were previously forecasted for the last 9 months of the year. This timing adjustment has been factored into the guidance we issued yesterday evening. Let me give you a quick update on our activities at each of our storage facilities. At Pine Prairie, we expect to place Cavern Well #4 into service later this month, with an initial working capacity of over 8 BCF, which is about 10% larger than previously anticipated. We intend to expand Cavern Well #4 to its current permitted capacity of 10 BCF that fill into our water operation, and subject to receiving approval of current permit applications, we anticipate increasing its capacity to as much as 12 BCF over the next several years. With the addition of our fourth cavern, we have now increased Pine Prairie's total working capacity to just over 32 BCF, which is a 36% increase over our year-end storage capacity of 24 BCF. Looking ahead to 2012, leaching operations on Cavern Well #5 at Pine…

Thanks, Dean. During my portion of the call, I will discuss the capitalization, liquidity levels and recent financing activities, and also provide comments on PAA's guidance for the second quarter and full year of 2011. As summarized on Slide 12, PAA exited the first quarter of 2011 with solid capitalization, $2.2 billion of committed liquidity and credit metrics in line with our targets. At March 31, PAA's adjusted long-term debt to capitalization ratio was 45%, and our total debt to capitalization ratio was 50%. Our adjusted long-term debt balance was approximately $4.5 billion, which excludes $500 million of notes used to fund hedged inventories. The total debt ratio includes $1 billion of adjusted short-term debt that supports our hedged inventory. This debt is essentially self liquidating from the cash proceeds when we sell the inventory. For reference, our short-term hedged inventory at March 31, was comprised of approximately 16 million barrels equivalent with an aggregate value of $1.4 billion. In addition to these inventory volumes and values carried as a current asset, we also have approximately 13 million barrels equivalent of line sale and base gas carried as a long-term asset that has a historical book cost of $654 million. Our adjusted long-term debt to adjusted EBITDA ratio was 3.4x, and our adjusted interest-to-interest coverage ratio was 5.4x. Included on Slide 13 as a condensed capitalization for PNG at March 31. PNG ended the first quarter with a debt to capitalization ratio of 24% and our debt to adjusted EBITDA ratio of 4x. Subject to covenant compliance, PNG's committed liquidity was $192 million at March 31. As a result, PNG is positioned to finance its projected organic growth capital for 2011 and the majority of 2012 without a need to access the capital market. In early March, PAA completed an…

Thanks, Al. As is apparent from our first quarter results, and the comments provided by Harry, Dean and Al, PAA is off to a strong start in 2011, and is well positioned to accomplish the 2011 goals we shared with you at the beginning of the year. These goals are listed on Slide 16. Importantly, we believe that accomplishing these goals will set the stage for continued growth for 2012 and beyond. Let me add a few comments regarding guidance for the balance of 2011, the impact of seasonality in market volatility and, in that context, our distribution growth. The midpoint of our updated guidance for 2011 reflects an increase of $75 million from $1.225 billion, to $1.3 billion. A portion of the over-performance is related to the overall market structure and market volatility, and the fact that PAA's business model and our asset base provides us with opportunity to benefit from those conditions without exposing us to downside. Those conditions of related opportunities are not one-time events, but they are also not very predictable. Irrespective of the favorable market conditions, a portion of the increased guidance for 2011 is associated with what we believe are sustainable increases in our baseline cash flows. Our second quarter guidance incorporates both increases in baseline cash flow, as well as the benefit of market opportunities that we have already locked in. However, the market structure of the second half of the year shifted to a more moderate condition, and thus, we have included only minor contributions from favorable market conditions for the last 6 months of the year. Accordingly, if the market shifts back into a favorable structure and volatility continues, there is upside to our already increased guidance. Let me now turn to distribution coverage and distribution growth. Our distribution coverage can…

[Operator Instructions] And our first question comes from the line of Darren Horowitz with Raymond James. Darren Horowitz - Raymond James & Associates, Inc.: Greg, I've just got a couple of quick questions. The first, as it relates to PAA, with several recent announcements around a lot of crude oil and condensate volumes ramping out of areas like Eagle Ford and West Texas, and now as you guys mentioned, more and more capital going into the development of the Bone Spring's Avalon area, how do you see the market in and around St. James changing? I mean it would seem that you've got production volumes sufficient enough to underscore some producer commitments, for not only more tankage but also more distribution capacity?

Well, this is Harry. I mean, I think given that the people are going to find ways to move crude over into the same trans areas as these projects develop. That's part of our Bakken North, if you look at it, it moves crude up Los [ph] and Enbridge and over to markets that are traditionally supplied by St. James by the volumes.

Yes, I would say, Darren, specifically with respect to the two plays you mentioned, the Bone Springs, and the Eagle Ford. Clearly, we think one of the ways that for example, the Eagle Ford's crude will ultimately find markets perhaps as far east as St. James because it is light, and it will probably have to be put on the water to get there. So I think it's just a matter of time before you see those volumes actually start showing up in significant volume. And then ultimately, I think you're going to see more and more rail as short-term solutions until volumes get to a size that they could support significant commitments. There have been a few projects that had been discussed. One recently announced, the talk about moving crude from Cushing, which is where a lot of the West Texas crude would normally aggregate to the Gulf Coast. Those, I think, everybody would like to see more routes to the Gulf Coast, I think it's tougher to get those commitments than it seems. Darren Horowitz - Raymond James & Associates, Inc.: I appreciate the color on that, Greg. Dean, just a quick one for you, and obviously with respect to the fact that you're not commenting on specific pricing levels or contracted volumes. But as you look forward, and you look at that 15% to 20% of 2012, 2013 capacity that you've got uncontracted, how do you balance when to lock in the forward curve, versus keeping that capacity open for optimization. I'm just trying to get a better feel for how you think about achieving certain spread thresholds relative to the timing of when you want to have that capacity firmed up.

Okay, let me take a shot, Darren. First of all, when it's still our philosophy to lease all the storage out to third parties, once we make a decision that we think our commercial group, internally can do better than that, they will take that in and basically, given that have a strategy of watching the market, I mean, continuously and then locking it in at a certain time. Without going into much detail, and I'm really not going to give too much color on this above that, it's really a case of just being on top of the market and really looking for opportunities. They're much smaller in case than they have been in the past, so you really have to be on top of it and watch it and pick your points where you think it's going to move. I mean given that, that's about as much color as I can give you on it.

Our next question comes from the line of Shawn Radtke with Oppenheimer. Bernard Colson - Oppenheimer & Co. Inc.: It's actually Bernie Colson here from Oppenheimer. This is kind of a topic that's been discussed quite a bit, the Cushing storage situation and in light of the EPD-ETP pipeline announcement. My question is really, if you could provide us some more color about what really drives the fundamentals of demand for storage at Cushing? And what do you guys see as a longer term, I guess, value for that after the bottleneck gets released?

Well, I think I'll take that in reverse order there, if I can. I think, Bernie, there's a lot of tankage that's being built in Cushing today, and probably over the last couple of years that really is kind of a sole-purpose tankage. It's purpose is to store oil primarily for financial arbitrage and not for operational utilization. And so I think over time, as these opportunities ebb and flow and they don't ever stay -- the nature of volatility is that it just doesn't stay in any one direction for an extended period of time. And so there's going to be volatility. I think you'll end up with tankage in Cushing than the aggregate, that's always referred to as whether it's $50 million per barrel or $60 million or $70 million, depending on where you're talking about working capacity or shale capacity. But you'll have two tiers of quality storage. The ones that has the highest value will be those that are cultured to the manifold systems and have multiple flexibility. And I can 't help but brag a little bit, when you look at Plains' tankage, we've got the ability -- we've got probably the most versatile manifold. We're connected to every significant pipeline coming into or going out of Cushing. We have dual header systems on there, so we can handle sweep and fire simultaneously. Yes, we can store, we can blend, we can segregate, we can do all that. Whereas if you end up with tankage that volumetrically may sound like a lot, but if it's at the end of a single line where you can either put only crude in or take it out. And there's not opportunities financially to take arbitrages, I think it has limited utilization. And so adding to that comment is the fact that 90% of our tankage that we have in Cushing, even though we're the largest or one of the largest, depending on which tanks are completed or not on a given day, 90% of ours are with true operational customers that are going to use it irrespectable, whether you're in a backwardated market or a containment market, because they needed to do all those functions that I've mentioned earlier. And so I think there certainly will be pressure up at times when there is significant contango on all storage values, and I think they'll be pressured down on -- when it's in backwardated market. But I think, inevitably, the tanks like ours, and there's a few others, too. We're not the only one that are well-connected. We'll continue to have the highest value. Your first question about what drives it? Spreads are a significant contributor to that.

In addition, one of the fundamental drivers, I think, that's caused a lot of source to be developed has been the influx of Canadian crude. Canadian crude is coming down in large diameter pipes and volumes that the typical mid-content refiner can't take all at once. So that's causing demand to be staged at Cushing. Some of it's blended to get to a certain refinery spec. And additionally, you've had some pipeline reversals that have given more of the refiners access to Cushing source barrels, and Canadian source barrels, we've got a pipeline project that we reversed the streamlined crude into Southern Oklahoma. Third party's reversal line to go into Southern Oklahoma. Oxy's reverse line take crude to western -- West Texas, they've been getting crude that way. So you've got more people taking small batches of Canadian crude or specifically, bundling [ph] crudes, and that's -- that has been causing a fundamental demand for increased storage. And then like Greg said, it's sort of compounded by the end-of-month spread.

Our next question comes from the line of John Edwards with Morgan Keegan. John Edwards - Morgan Keegan & Company, Inc.: Just kind of following up Bernie's question. I'm just curious what -- I guess, what would you view as sort of the optimal storage at Cushing? Or, I guess, another way of asking it, how long do you envision that the over-supply situation being in effect?

John, it's a pretty dynamic situation right now of -- and you know me, I'm guilty of using of a lot of analogies, but it's a little bit like trying to shoot a bird in a crossing pattern. You can't aim where it's at. You've got to aim where it's going, and then you've got to anticipate whether it's got a headwind or a tailwind, and you hope your neighbor doesn't shoot you in the process. But in any event, I would say that there's a lot of things happening right now. The demand for the economy can affect what's going on, on the demand side where the natural pull-out at Cushing. At the same time, there's a rising level of domestic production that's coming in. And even though there are some big projects being announced, if tomorrow, you could actually probably move, what, Harry, 40,000, 50,000 barrels a day out of Cushing, you might relieve the pressure immediately and the market might flip back into a smaller but quite patterned basis differential. So I just think it's going to be dynamic for the next 12 to 36 months. And it'll be a function somewhat of how production and supply continues to come in out demand, true economic consumption and then ultimately, the infrastructure relief that happens whether it's in small 25,000 to 50,000 a barrel a day increments, or whether it's some big pipeline project. John Edwards - Morgan Keegan & Company, Inc.: Okay. And then at what kind of -- what do you view as the additional demand for storage at Cushing in the current market? How -- I mean, there's been a lot of tankage projects announced. What's your thoughts on that?

I think it's -- we certainly see the conversations we have with our operational customers, and we're building an additional 4.2 right now million barrels, which will take us up to about 18.5 million barrels, I believe. But those are already contracted and again, those are for pure operational needs. So it really has nothing to do with some of the other financial issues. We're not sure exactly what's going on in some of the other markets but clearly, they've got demand there with other competitors, so they wouldn't be building, I don't think so. I just think it's really hard to gauge. Clearly, the time spreads have come in now, I think they're around $0.50 a month, in the near month. And then it goes down to about $0.25 out, and then get smaller even further out. So there's probably not a lot of structural encouragement today where if we were having this discussions 3 or 4 months ago, then it might've been $1 on the front line from it -- might extend for a while. Clearly, the differentials are providing some support there, because there's also inter-month spreads on the differential. So your question is just how long are people committing to the demand storage? We've got the same questions. We like where we're at with respect to our position in our customers slate, because we think we've got customers that will -- that have economic value in the tanks we provide, irrespective of the market condition.

[Operator Instructions] And speakers, no further questions at this time.

Okay. I want to thank everybody for attending. We know this is a very, very busy time period for earnings releases, and other news releases have been coming out so we appreciate your dedication to this, whether you're on the live call or in the replay. And we look forward to updating you for the second quarter results. Thanks, operator.

You're welcome. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive TeleConference. You may now disconnect.