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Plains All American Pipeline, L.P. (PAA - Analyst Report) has provided its second-quarter 2013 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) guidance.

Second-Quarter 2013 Guidance

The partnership has increased the midpoint of its second-quarter 2013 adjusted EBITDA guidance by roughly 10% from its earlier projection. Previously, Plains All American Pipeline expected that its adjusted EBITDA will be in the range of $415 million to $455 million with midpoint being $435 million. Increase in guidance is primarily driven by positive market conditions and persistent robust fundamentals.

Full-Year 2013 Outlook

Plains All American Pipeline expects its adjusted EBITDA in 2013 to be in the band of $2,110 to $2,210 million, up from $2,107 million a year ago primarily due to the benefits of solid first-quarter results and a marginal improvement in the second quarter outlook.

First-Quarter 2013 Recap

Plains All American Pipeline reported adjusted EBITDA of $739 million, up 57% year over year owing to strong results from the fee-based Transportation and Facilities segments, and proper implementation in the margin-based Supply and Logistics segment.

Our Take

During the first three months of 2013, Plains All American Pipeline’s net cash provided by operating activities increased more than 200% year over year to $979 million. Strong liquidity position enables the partnership to invest additional $300 million in 2013, which will drive the capital spending plan to $1.4 billion.

It is evident from Plains All American Pipeline’s recent activities that the partnership continues to follow steady organic growth strategy. The partnership is currently developing its Mississippian Lime pipeline, Rainbow 2 pipeline and Gardendale Gathering System projects.

In addition, Plains All American Pipeline recently completed acquisition of natural gas liquids (NGL) assets from a subsidiary of BP plc (BP - Analyst Report). The partnership has already experienced positive impact from the acquisition in first-quarter 2013. The partnership’s Transportation and Facilities segments’ robust performance was primarily driven by the addition of these NGL assets. We believe this acquisition will boost Plains All American Pipeline’s midstream business in the future through addition of pipelines, storage capacity, fractionation plants and supply contracts.

Houston, Texas-based Plains All American Pipeline owns assets strategically located in well-established oil producing regions, catering to major U.S. refinery and distribution markets.

Plains All American Pipeline currently has a Zacks Rank #3 (Hold). Other stocks from the industry that are presently performing better include Delek Logistics Partners, LP (DKL - Snapshot Report) with a Zacks Rank #1 (Strong Buy) and Kinder Morgan Management LLC with a Zacks Rank #2 (Buy).

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